Germany’s July milk was worth, on average, 20.65c/kg less than it cost to produce, according to the latest figures from the German Office for Agrisociology.
Producers received an average 24.4c/kg compared with a 45.05c/kg cost of production.
The German Farmer’s Association (DBV) called for state action on what it termed a market crisis and demanded processors be more flexible and market-oriented.
The DBV said market structures were unable to cope with an increasingly liberalised, post-quota marketplace.
This follows what the European Milk Board (EMB) described as high levels of participation in voluntary production cuts which offered 14c/litre in September for each litre produced below the rate in the corresponding period last year.
Such uptake showed the extent of the milk crisis and also how European policy could effectively induce collective market reactions from producers, the EMB, which represents about 100,000 milk producers from 16 EU member states, said.
The DBV said German production had been 5% down on 2015 levels since May.
While the market upturn was forecast to continue, farm leaders said that 26c/kg by the end of the year was not nearly enough to compensate for the losses of the past months.
Recent EMB announcements pegged several European countries at a cost of production of above 40c/kg.
However, in Belgium and the Netherlands farmgate prices averaged 22.7p/litre and in France were at 30.9p/litre.
A DBV spokesperson said “The reasons for the current market recovery lie, in particular, in a growing demand for dairy products and the reaction of dairy farmers to extremely low prices.
“Despite the improving market, we still require politics and processing to help us in market crises which may be ahead.”
Britain’s Agriculture and Horticulture Development Board said the planned Netherlands cull 175,000 would help UK and EU milk prices.
The proposal, which included €50m of support for producers, had been submitted to the EU Commission for review.
It was a bid to save Dutch nitrate derogations at the expense of 11% of its national herd.
The Netherlands has breached its phosphate limit for three years in a row, according to the levy board.
While EU25 milk deliveries fell 6.3% between April and August, the Netherlands invested in its dairy industry to drive up production, which fell by only 1.33% in the same period.
High levels of production in the Netherlands and Ireland were widely viewed as key drivers to the recent dairy crisis – the worst to hit the industry in 30 years.
“There’s already a shortage of milk in the EU so any reduction in Dutch milk deliveries would put upward pressure on milk prices in the UK,” AHDB senior dairy analyst Luke Crossman said.
“The impact on their dairy industry will depend on how staggered an approach they take to the cull but production will undoubtedly be affected.
The sudden upsurge in Dutch cull cows that would likely flood continental markets early next year would have little effect on the UK beef market, AHDB beef and lamb senior analyst Debbie Butcher said.
“Our two markets are not strongly related. Dutch beef is aimed at the manufacturing market so it’s unlikely demand for UK beef will be at all compromised.
“Countries like Poland and France who have culled a lot of cows this year will be more affected and this puts their hopes of a better period next year at risk.”
The EU nitrate directive was introduced to protect water quality through reducing the amount of nitrates spread from agricultural sources over nitrate vulnerable zones.
The Netherlands faced large fines should it not reduce nitrates use but faced cutting milk production by 750,000t as a result of the cull.
It was understood the EU commission wanted the changes implemented quickly, whereas it would be in Dutch interests to minimise disruption by spreading the cull out.
UK Farmers Weekly
