Milk prices slowing EU dairy herd decline

By Neil Merrett

- Last updated on GMT

Related tags: Cattle, Milk, Dairy farming, Usda

The current high prices for raw dairy milk being paid by processors
and consumers is encouraging Europe's dairy farmers to better meet
growing demand for the product, according to a new report.

The US department of agriculture (USDA) has said that despite an estimated 0.9 per cent fall in EU dairy herd sizes during 2007, declines were slowing down amidst the high price of milk products and improved production quotas. High margins for processors ​ With dairy processors across the globe continuing to bemoan the impacts of these higher prices, the potential supply benefits of an expanded dairy herd in the bloc could go some way to alleviate industry concerns over costs. Dairy herds are already expected to expand in a number of markets like Germany, the Benelux, the Iberian Peninsula, with particularly strong turnarounds in newer member states like Poland, according to the USDA. Although estimates that cattle herds will continue to decline overall in 2008, pricing improvements and a proposed two per cent hike in milk production quotas will see more farmers in newer member states like Poland turning to cow farming, according to the USDA. Overall, the trend will help revive both the dairy and beef sector, the report claimed. This potentially higher number of cows available is said to be the result of a growing number of farmers holding on to their dairy cows, and improvements in the number of young calves and heifers assigned to produce milk, the USDA said. Blue Tongue disease (BTD) ​ There are still some challenges that could affect any potential benefits for the dairy industry of increased herd numbers though. Blue Tongue disease (BTD) serotype 8 rapidly expanded across the bloc during 2007, threatening herd numbers. However, the report adds that the European Commission is looking to begin a vaccination program in herds at risk of contamination in all infected member states to better control the disease.

Related topics: Markets, Pricing Pressures, Fresh Milk

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