Germany dairy farmers strike, UK implications?

WHILE dairy farmers in the UK are struggling to cover costs even as milk prices are rising, on the continent the situation is even worse, with many of the major buyers cutting the price farmers receive for their milk.

On Monday an estimated 9,000 German farmers demonstrated outside a major dairy in Weihenstephan, while a large number of producers were planning to withhold milk from their regular outlets yesterday.

Many supermarket chains have slashed the retail price of dairy products and these reductions have been passed right down the chain to farmers.

Ernst Halbmayr, an executive committee member of the European Milk Board, said: "Farmers are not delivering milk to the dairies. A similar situation is developing in Italy, France, Luxembourg and Spain."

Romuald Schaber, leader of the BDM German association of 30,000 dairy-cattle farmers, said the group expected the boycott to last between a week and 10 days.

He asserted that participation was "overwhelming" with 80 per cent of farmers taking part "in some regions." The unsold milk is being fed to calves or dumped in farm-waste tanks.

Ex-farm values have declined by more than 5 per cent in the past year on the continent, whilst production costs, as in the UK, have risen steeply.

Germany's dairy output prices are controlled by a few powerful companies which currently pay 27 euro cents (21.6p) a litre for milk in northern Germany according to BDM data.

In the UK falling production has forced the major UK supermarkets and the dairy companies to increase their prices to farmers, but if international dairy commodity prices fall then there is a possibility of downward pressure on ex-farm prices over here. The UK market remains in a state of uncertainty, with many farmers contemplating their future strategies.