An increase in milk production at global level is posing a serious threat to dairy co-operatives from across the world. In Europe agricultural exports are also under pressure due to the Russian boycott against EU agricultural products.
Copa-Cogeca, the organisations representing European farmers and agri co-operatives argued that without EU action many producers would be forced out of business by winter.
Copa-Cogeca secretary-general Pekka Pesonen said: “I welcome the fact that EU Ministers have agreed to look at increasing the EU milk intervention price to help put a floor in the market. This is crucial to reflect rising production costs and stop putting downward pressure on the dairy market.
“It is also a positive step to create a high-level group to look at the future of the EU dairy sector and also to look at tools to deal with the increasing volatility on agriculture markets. We must be involved in this group. It is also good that the EU Commission will boost funds for EU promotion programmes and step up work to find new market outlets but this will take time.”
Some dairy co-operatives are taking different measures to cope with the deterioration of the milk market. In the UK Arla Foods has launched a new farmer owned marque for its milk to increase customers’ awareness of the co-operative nature of the business.
Arla is also organising meetings across the UK to enable its 3,000 British farmer owners to express their concerns and ideas regarding the promotion of the benefits of purchasing dairy products produces by a co-operative.
Ash Amirahmadi, head of milk and member services at Arla Foods UK, said: “We are in a position to hold our milk price for September, based on our current and future business performance. However, we must remain cautious; the global dairy market remains volatile and it is too early to indicate whether the tide has turned because farmer milk production remains high on a global level, against a backdrop of restricted demand.”
In response to the latest fall in milk prices, New-Zealand based Fonterra is providing loans to its members. A global leader in dairy nutrition, Fonterra is a farmer owned co-operative and the largest processor of milk in the world.
Farmers had until 25 September to apply for loans, which they can repay either in full or partially at any time. No security is required over their shares or any other assets.
The co-operative’s chair, John Wilson said: “Being able to help our farmers is all about standing together as a co-operative and using our collective strength to get through these tough times”.
