In an interview given to the newspaper Les Echos1, Michel Léonard, Chairman of the Lactalis company board, the European leader for cheese, estimates the continued drop in the milk producers’ income inevitable in 2009. The agreements negotiated between producers and marketers haven’t, according to him, allowed for the compensation of more than half the drop in the prices of butter and powder ; and the huge stocks, especially in New Zealand (1 million tons stored) are not helping price recovery. Even the start at mid-January by Brussels of public purchases at fixed price hasn’t allowed an inversion of the trend, because some marketers choose to go through other channels than intervention to be paid earlier, which is costing them 20 to 25% of their sales price.
Lactalis isn’t the only milk marketer to think alike; and some companies, such as the cooperative groups Eurial Poitouraine (Loire-Atlantique) and Glac (Charente-Maritime) in particular, do not hesitate to dissociate themselves from the inter-professional agreement reached with such difficulty in December 2008 and which defined the lower prices paid to marketers until March 1st, delaying their payments from quarter to quarter.
At a time when negotiations between the actors of the milk inter-profession must resume in order to define a new indicator system allowing for the orientation of the price of milk paid to producers during the second quarter of 2009, these statements are once again not encouraging for the future. The context is indeed not favourable to the producer, who sees his profits shrink ever more drastically, caught between historically low milk market prices and increasing operating expenses. And it isn’t through solutions relative to the environment, such as the numerous inter-professional agreements, which need to be renegotiated every 6 months, that structural difficulties will be durably settled; the case of the milk sector, illustrates more than any other the need to put in place long term stabilisation policies.
1 Cf. Les Echos, Michel Léonard : « Les prix du lait aux producteurs doivent continuer de baisser en 2009 » 09/03/2009