One of Europe’s leading agri-businessmen has told Farming Life that the EU will not be awash with milk, once dairy quotas are abolished next spring.
Alexander van der Lely, CEO of the Netherlands-based Lely manufacturing company, believes that tightening environmental regulations will stymie any aspirations which dairy farmers in the EU’s foremost milk producing regions may have to increase cow numbers.
Speaking at this week’s launch of the company’s new continuous baling system, he added: “The problem that dairy farmers in Holland will have is that of finding sufficient land on which to spread their slurry. There is already a strong indication that the Dutch government will introduce national legislation to ensure that the environmental footprint generated by the farming sectors is wholly sustainable. And this may well be replicated in other EU member states.
“So I do not believe that the ending of dairy quotas will represent a signal for EU farmers to significantly increase milk output.”
While admitting that the Republic of Ireland may well increase its milk output significantly over the coming years, significantly, the Lely supremo does not hold the view that such a development will serve to bring undue pressure on EU milk prices.
He explained: “The reality is that the world’s population is set to increase by 50% over the next three decades. In tandem with this, the growing wealth of consumers in China, the rest of Asia and Africa should ensure that international milk prices will, for the most part, be retained at sustainable prices.
“Volatility in the market place will remain a problem. And we are seeing this very feature having a severe impact on international dairy prices at the present time. But there is no doubt that the long term trend for milk is extremely positive. This will be driven by the growing recognition that many of the constituents within milk have extremely positive health generating properties.”
Meanwhile, the impact of Russia’s ban on EU food imports is continuing to have a major impact on Europe’s dairy markets. Finnish journalist Tapio Vesterinen, who attended this week’s Lely launch event, told Farming Life that retail milk and dairy prices in his country had fallen by 50% since the beginning of August.
“This is because our processers, who normally export all of their surplus dairy stocks to Russia, now have no option but to flood their home market,” he added.
“Farm gate milk prices have already fallen by 6 Euro cent per litre in response to these developments. If this trend is sustained for the next twelve months, dairy farmers in Finland will incur losses of around €50 million. This is not a sustainable situation.”
In the wake of the dairy crisis now unfolding in countries such as Finland, Latvia, Estonia and Lithuania, the EU Commission is coming under increasing pressure to introduce meaningful export refund support measures, as a way of putting a realistic safety net in place for EU milk producers over the coming months.
Source: Farminglife
