Milk price in EU may drop below 30 euro cents per liter by December 2014
Raw milk price in EU may drop below 30 euro cents per liter by December 2014. This is an estimate of Christophe Lafoug`ere, Gira Board member. In some countries a significant decrease is possible: e.g. in Baltic states – to 18 euro cents per liter as a result of global dairy market changes.
First of all quota abolishment in EU is sure to influence the raw milk production in 2015. Notwithstanding the fact that the quotas are destined to start working in 2015, milk production in EU 28 in the first half of 2014 has already increased by 5.4%. Germany, Ireland, Poland, Denmark and the Netherlands increased production by 1.7 mln tons above the quota. Secondly, the price will be also influenced by China’s activity decrease as the country’s stocks are oversupplied. Thirdly, the price is significantly influenced by Russian embargo. Fourthly, main trading boards show dairy products price decrease. Experts forecast 2008-2009 situation repeat when SMP, WMP, cheese, butter and other products’ prices sharply decreased. Milk overproduction in EU will result in SMP and WMP production increase, and European producers will get an opportunity to strengthen positions on these markets.
