The plight of milk producers supplying the dairy cooperative Arla in Denmark and Sweden was the lead article in my Danish newspaper yesterday morning. Interviews with a number of farmers supplying Arla highlighted their loss-making situation at current milk prices. The journalist writing the story highlighted that a number of factors were responsible for the current low milk prices: the Russian import ban on EU dairy products, lower import demand in China but also increased production in the EU which he attributed to the removal of milk quotas in April of this year.
That EU milk production has increased is clear, as shown in the figure below. Production has increased from 135.2 mt in 2008 to a forecast 149.4 mt in 2015 and an estimated 150.8 mt in 2016. More recent data from the Milk Market Observatory (MMO) Dashboard for 23 December 2015 even suggests that the expected increase in 2015 will be significantly higher at 1.8% rather than the 1.1% shown in the December 2015 short-term outlook.… Read the rest
Is the removal of quotas responsible for the increase in EU milk production in 2015?
