German dairy farmer must get a grip on milk price

This is what dairy farming chairman Karsten Schmal of the German Bauernverband and chairman Detlev Latka of the German dairy organization MIV said during the Berliner Milchforum.

Latka, who is also CEO of cooperative dairy company Hochwald, is cautious with his expectations for the dairy market. The persistently high milk supply makes him reserved. Geopolitical tensions, such as the war surrounding Iran, also make looking ahead difficult. Nevertheless, according to him, the global dairy market seems to be moving in a more positive direction again.

Neither is calling for less milk to be produced. According to Schmal, dairy farmers should actually take into account an increasing demand for dairy products.

More milk in 2025
Looking back at 2025, both directors note that German milk production increased by 1,6% last year. Milk supply increased clearly, particularly in the second half of the year. Since the autumn of 2025 until now, approximately 6% more milk has been delivered than in the same period a year earlier.

Moreover, the imported milk contained relatively high levels of fat and protein. This increases the amount of processed dairy and thereby increases the pressure on the processing industry.

Despite a sharp price drop at the end of the year, the average milk price for the whole of 2025 remained relatively high. Dairy farmers received an average of €52,00 per 100 kilos of milk. That is the highest milk price ever since 2022.

In the final months of the year, however, the milk price dropped below €40,00 per 100 kilos, with the sharpest decline in northern Germany.

According to Schmal, companies that had locked in part of their milk price in advance performed better during this period. At the same time, he does not consider it a given at this moment that dairy farmers will once again have to lock in prices en masse.

Structural pressure on the sector
The sector hopes that the market will recover again. In this regard, Schmal also expects more support from German politicians for the dairy farming industry.

According to him, Germany is among the four or five largest milk producers in the world, but many dairy farmers are struggling economically. On average, income is too low to modernize barns in time or to finance new installations.

Many barns are outdated, while new construction is expensive and permit procedures take a long time. According to Schmal, it can take eight years between application and approval of a permit.

The structural pressure on the sector is also visible in the number of businesses. Approximately 2% of dairy farmers cease operations annually. The dairy herd is also shrinking. In about five to six years, approximately 600.000 dairy cows have disappeared, about 14% of the total.