Milk price is far from covering costs

The latest prices are in addition to a study from the German BAL (Büro für Agrarsoziologie und Landwirtschaft) from 2012. The price-cost ratio shows that milk prices do not cover production costs in Germany. In April 2019, producers only recovered 78% of their production costs from the milk price; the deficit was therefore 22%. The deficit has fluctuated between 10% and 13% over the past 34 years.

Cost price increased 7%
The Milk Marker Index (MMI) shows how milk production costs in Germany have developed in recent years. In April 2019, the MMI was 107. This means that production costs for German dairy farmers have increased by 7% compared to the base year 2010.

“The persistent gap between costs and returns illustrates the fact that the dairy sector is keeping dairy farmers in its grip,” says Johannes Pfaller, member of the EMB executive committee and himself a milk producer in southern Germany. "Just enough is paid to maintain production, but there is nothing left for us. Something has to change quickly." Pfaller advocates, among other things, an adjustment of the EU agricultural policy, which, according to him, can no longer continue to focus on cheap raw materials for the dairy and food industry.

Costs in six countries
In addition to Germany, cost calculations are also carried out in five other countries. The calculations of milk production costs in Belgium, Denmark, France, Germany, Luxembourg and the Netherlands for 2017 have recently been published.

This shows that Dutch dairy farmers received €2017 per 42,01 kilos of milk in 100. Despite the increased milk price compared to 2016 (+6,7 cents), 16% of the production costs were not covered.

It should be noted that the calculations are based on certain standards, including wage costs and the number of hours worked.