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.
Focus on issues

« Dear dairy farmers and interested parties »



Kjartan Poulsen, Member of the EMB Board and president of LDM Denmark



The extract below
1 is more than an editorial, it is a wakeup call.

As we helplessly watch the continuing spread of the Eurpean milk crisis, Kjartan Poulsen, member of the Steering Committee of the European Milk Board (EMB) and Chairman of MDL Denmark warns of being lulled into the false illusion of a return to Chinese and Russian markets.

We have once again failed to learn the lessons from previous crises such as 2009: as Thierry Pouch recently reminded, to produce is one thing and to sell is another. He also notes that the situation would not be as such if a “manifest error of anticipation by our decision makers, verging on the irrational or worse, had not been committed, reflecting a misunderstanding of the functioning of the economic system”.

We are now back in full contemplation with regards regulatory mechanisms and Momagri will echo the views on this issue in the coming months.


momagri Editorial Board



We should have learned our lesson by now, but we keep producing ever more milk, anticipating Russia and China to re-enter the market, whilst farm-gate milk prices drop and producers see themselves forced to give up their livelihoods.

Listening to the dairy companies’ explanations for the low farm-gate price could create the impression that China has brought all milk imports to a complete stop. That is, however, not true. China has not left the market as we are told; the Chinese still import milk but only to the extent we used to know from the time before their imports skyrocketed in 2013-14. At first we were told that the purchasers had left the market altogether, but were expected to come back in a couple of months. That was postponed to the last quarter 2014, then to the first quarter 2015; now the last quarter 2015 or early 2016 is mentioned as the time of their return. “We may have underestimated the volumes purchased” sounds one of the explanations.

To me it is all too clear that none of the people making these statements knows anything. But a great many people would like to comment at the producers’ expense, because we are the ones kept in the dark with the vain hope that we are ready for when the market picks up again.

I see no reason why China should return to the market with the force of 2013-14, and even if the Russian market opens up, the shelf space has meanwhile been taken by others. A return to the Russian market will be like entering a totally new market. In Denmark we hope Arla Foods will find it easier because of to their previous commitment, but we can only hope. In mere desperation we attempt to find new emerging markets like Nigeria, Ivory Coast and other African nations. Fat lot of good that will do!

When the milk price goes up on the world market it is interpreted as “The market is screaming for more milk”. Conversely one must now conclude that the world market is screaming for less production. Why are all the great European dairy companies screaming for so much more milk, and why are the dairy farmers producing so much more milk when it is obvious that it cannot be sold at a cost- covering price?



1 The entire article is available from:
http://www.europeanmilkboard.org/newsletter/english/newsletter-july-2015.html



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Paris, 19 December 2018