The EU dairy sector: Main features, challenges and prospects

17-12-2018

The EU dairy sector is the second biggest agricultural sector in the EU, representing more than 12 % of total agricultural output. While milk is produced in all Member States, farm and herd sizes, yields and types of farming vary widely across Europe, from free-range farming in Alpine areas to large specialised dairy farms in the north-west and centre of Europe. In 2016, 157 million tonnes of milk were delivered to dairies, where raw milk is processed into fresh products such as cheese or butter. Part of the common agricultural policy, the EU's dairy policy consists of a range of instruments designed to support farmers and address market imbalances. In particular, it includes common market organisation, public intervention and private storage provisions, direct payments and rural development measures. The policy has been constantly updated over time, one recent development being the suppression of milk quotas in 2015. The 2014 to 2016 crisis, during which raw milk prices dropped dramatically from around 40 to 25.7 cents per litre, triggered a reaction by the Commission based on public intervention-buying, private storage and a range of exceptional measures. Two aid packages were adopted, including incentives for farmers to reduce production. Recovery was in sight by 2017. In the coming years, growing EU and global demand is expected to support world dairy markets, without hindering price fluctuations and market imbalances. Resilience and sustainability are key words for the future of the sector. This can be achieved with innovation, as a way to reconcile the need for farmers to earn a decent living, consumer demand for affordable and quality dairy products, and environmental/animal health requirements.

The EU dairy sector is the second biggest agricultural sector in the EU, representing more than 12 % of total agricultural output. While milk is produced in all Member States, farm and herd sizes, yields and types of farming vary widely across Europe, from free-range farming in Alpine areas to large specialised dairy farms in the north-west and centre of Europe. In 2016, 157 million tonnes of milk were delivered to dairies, where raw milk is processed into fresh products such as cheese or butter. Part of the common agricultural policy, the EU's dairy policy consists of a range of instruments designed to support farmers and address market imbalances. In particular, it includes common market organisation, public intervention and private storage provisions, direct payments and rural development measures. The policy has been constantly updated over time, one recent development being the suppression of milk quotas in 2015. The 2014 to 2016 crisis, during which raw milk prices dropped dramatically from around 40 to 25.7 cents per litre, triggered a reaction by the Commission based on public intervention-buying, private storage and a range of exceptional measures. Two aid packages were adopted, including incentives for farmers to reduce production. Recovery was in sight by 2017. In the coming years, growing EU and global demand is expected to support world dairy markets, without hindering price fluctuations and market imbalances. Resilience and sustainability are key words for the future of the sector. This can be achieved with innovation, as a way to reconcile the need for farmers to earn a decent living, consumer demand for affordable and quality dairy products, and environmental/animal health requirements.