A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
A look at the news

Will there really be a milk crisis in 2015?

January 26, 2015

Our neighbors on the other side of the Channel are sounding the alarm: their dairy sector is experiencing a significant crisis with more than 20 percent fall in milk prices over the past 12 months, at a time when the world price has collapsed by 50%.

The UK largest dairy cooperative business––First Milk––recently announced it was deferring its payments to over 1,000 farmers because of the price collapse. This is a first-ever occurrence. Dairy farmers in England and in Wales, whose number declined by 50 percent in 12 years to now reach 10,000, are now getting 20 pence per liter of milk, while production costs rose by 30 pence. As a result, milk is less expensive than water, with two liters of milk going for 89 pence in some supermarkets.

At issue is a broad set of endogenous and exogenous factors:
    - A sizeable global production driven by demand—especially Chinese demand––which no longer keeps pace with supply (a two percent annual growth against a five percent growth in global milk production);

    - The consequences of the Russian embargo on the European milk market that deprive European farmers of outlets for two million tons, says the Association of Independent Milk Producers (APLI);

    - As the ultimate aggravating factor, the intrinsic volatility of the dairy market and the uncertainty regarding the industry in Europe following the elimination of quotas.
The situation is all the more serious that we are seeing a “domino effect”. The European Milk Board (EMB) indicates that a milk price below €300/1,000 liters is reported in several EU nations. In France, close to 500 milk farmers from Normandy have launched litigation against Lactalis, their client.

If action is not taken to thwart falling prices, some experts are predicting that England and Wales, to mention just a few, will count less than 5,000 dairy farmers in the five next years. For the time being, a group of British MPs is calling for emergency measures to protect milk farmers from market volatility. And they are not the only ones in Europe. Yet, the wait-and-see––or even naïve optimism––from Brussels paired to the inadequate tools proposed in the new CAP to face the situation, are indeed cause for worry. Must we wait for the total collapse of the European milk market to act?

Today, it is as important to pursue an agricultural policy to safeguard the future of our agriculture and food security than to implement measures to prevent future financial crises. And this strategic imperative must be handled over the short- as well as the long-term, that is to say in view of the upcoming elimination of milk quotas next spring, and to ensure the survival of the dairy sector.

Page Header
Paris, 25 June 2019