The Big Business of Dairy in Europe
Britain’s largest dairy companies, Muller and Arla, are reducing the price they pay farmers for raw milk. Over-production, Russia’s embargo on imports of European food, lower Chinese dairy product imports and the ending of European milk quotas, have all contributed to today’s harsh situation for dairy farmers.
The standard litre price is now around $0.36 and British dairy farmers estimate it costs $0.47 to produce a litre of milk. Bear mind that Britain has the second highest per capita consumption of liquid milk in the world, at 105 litre/head, just behind Australia at 110 litres. In France, the raw milk price fell to a low of $0.33 /litre in June. In July, producers and processors agreed a minimum milk price of $0.37, but the agreement collapsed a few days later. Hardly surprising with world milk prices around $0.22 /litre.
Dairy companies across Europe are reducing their milk prices, provoking farmer protests with tractors blocking roads and spectacles of tanker loads of milk poured onto streets. The graphs below showcase that after a decade of rising milk prices, Europe’s farmers are suddenly faced with a sharp decline.
Across Europe, there’s grim talk about the end of family farms and the excessive power of supermarkets. Interestingly, however, farmers who invested in their own milk processing units are highly successful, capturing added value for milk, butter and cheese, often organic. They have broken the traditional supply chain that gives excessive market power to the super-large milk processing companies. These family-producer-processors are successful, they can barely meet demand for their products, which are high quality and completely traceable.
For an example, visit and watch the Moo-Man movie about dairy farming in England. The movie showcases how food supply chains in Europe are changing, but step-by-step and with hesitation. For example, many topline restaurants today buy produce direct from farmers. Vegetable producers near towns and cities are opening their own outlets and selling direct to shoppers. Dairy farmers are opening their own processing units and becoming butter, cream and cheese producers.
Insta-Pro is helping dairy farmers stay competitive by enabling them to access small-scale processing plants for feed proteins. Companies as far apart as Canada and Portugal have installed small-scale plants to process soybeans and cottonseed into specialty bypass proteins for dairy cows.
These protein meals have an undegradable protein level (bypass value) of 52-55%. Studies have shown that cows fed ExPress® soybean meal produce 2lb (almost 1 litre) per day more fat corrected milk than cows fed solvent extracted meal or competing bypass products. With today’s emphasis on healthy and natural food, many dairy farmers are replacing solvent-extracted meals with high-quality, mechanically processed proteins. Our dedicated team of nutritionists, service and sales teams are always available to assist you with finding solutions to your local challenges.