Inside Milk
Cost price German organic milk higher than yield
The production costs of 1 kilo of organic milk in Germany turned out to be higher than the yield in the 2018/2019 season. This is shown by the new figures from Farm Economics and Rural Studies Office (BAL), which are now published every year. Even so, organic milk production in the country has increased by almost 20% in recent years.
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The growing demand for organic products is motivating livestock farmers in Germany to switch, writes the European Milk Board (EMB). New figures show that organic milk production increased by almost 2017% in 2018 and 20. According to the EMB, this also creates a greater need for information, for example about production costs. That is why BAL has decided to publish these figures annually from this year.
High cost price
The figures show that the total production costs for the 2018/2019 season amount to 71,89 cents per kilo. However, all subsidies, which are considered agricultural income, must still be deducted afterwards. This leaves a cost price of 60,29 cents per kilo. "When you compare the price with the yield of 47,40 cents, it is clear that organic dairy farmers cannot afford it," said Kjartan Poulsen of the EMB. In short: only 79% of the costs are compensated in the revenue. "For us it means that the yield must increase by 16,34 per kilo."
In addition to the figures for last season, data for the past 5 years have also been published. This shows that the organic milk price has remained relatively stable in recent years: between 47 and 48,5 cents per kilo. However, production costs averaged 64,16 cents per kilo. "There has already been a wedge in the past 5 years. Consumers who choose to buy organic products expect to support cost-covering prices and fair compensation for organic milk producers. This proves that this is unfortunately not (yet) the case."