A market surplus of volumes, falling producer prices, and far too low producer income. These issues are recurring themes in dairy sector developments and characterise the current situation. To combat this trying situation, the European Milk Board (EMB) was established in 2006 and developed a market-oriented concept for crisis prevention known as the Market Responsibility Programme (MRP), which it has made available to the EU.
Activating the MRP and halting the volume increase
“Dairy producers in Europe are currently experiencing a drop in prices, which is threatening their farms,” said EMB President Kjartan Poulsen. Following a brief, unusual period of near-cost-covering prices, rising volumes and declining demand have created a market imbalance. During their press conference at the Paris Agricultural Show, the EMB Board emphasised one key point: The EU Commission should have the monitoring agency assess the market and implement volume reductions based on the MRP’s example.
Policies are required to put an end to retailer brand price dumping.
“The market situation is rough,” added Boris Gondouin, French EMB Board member, during the press conference, pointing out yet another negative market development: In many European countries, policymakers are allowing retailers to push national and fair brands brought to market by dairy farmers themselves off the shelves by price dumping with their own private labels, particularly since the Covid crisis and the war in Ukraine. Strong protests are already taking place in Europe against these unfair trade practises, as was the case, for example, in Belgium and France at the beginning of February. “Policymakers must intervene to stop this unfair behaviour,” Gondouin added. “Without adequate regulation, we will quickly reach a point where too much has been removed and destroyed, and there will be no turning back.”
As the EMB stated further during its press conference, producers’ market position must be actively strengthened. “This industry requires strong, horizontal producer organisations that negotiate with dairies. Policymakers must help to facilitate and support this. “Ideally, these organisations would be transnational in order to cover the market in larger regions,” Poulsen added, before urging European dairy farmers to join appropriate organisations in order to increase dairy farmers’ market impact and bargaining power.
