Dairy cattle in Irish pasture.
July 6, 2016

Milk Price Turmoil Might Force Dairy Production Cuts in Europe

Top Story  |   |  By: Jim Dickrell

A report from AgriLand, Ireland’s largest farming news portal, suggests that increased government aid to dairy farmers might also mean a cutback in milk production. That’s not sitting well with Irish dairy farmers, who had revved up milk production in anticipation of the end of milk quotas last year.

The European Commission will consider the matter this month. Direct government aid provided 32% of dairy incomes in 2015, notes a Teagasc National Farm Survey. Even more aid this year might require Irish dairy farmers to cut milk production, because all European Union (EU) farmers are contributing to the EU Crisis Reserve. The milk price crisis is further complicated by the United Kingdom’s “Brexit” vote in June.

There are signs that EU milk production is slowing, with dairy cow slaughter up 5.8% in the first quarter of 2016, and up 12.6% in April. Most of the culling, however, is coming from France, the UK, the Netherlands and Germany.

EU farmers also note that a cut back in milk production in Europe will not address increases from the United States, effect the Russian ban on dairy imports or impact global oil prices.