Calling for higher production prices––€0.43 per liter instead of the current €0.28 to €0.34––the German Federal Dairy Farmers Association (BDM), whose membership produces 45% of Germany’s milk, staged a broad delivery strike on May 27, a protest followed by 95% of its 32,000 members.
The trade association deems excessively low the price paid by retailers to dairy farmers in comparison with rising fuel and cattle feed costs. The situation thus allows dairies and retailers to profit from a dominant position and to force lower milk prices paid to farmers.
But for Hubertus Pellengahr, of the German Retail Federation (HDE), the situation is a consequence of the recent market fluctuations: “Last year, we faced a milk shortage and prices rose. Today, we are coping with a milk over-production that generates lower prices.” The OECD has, for its part, denounced the German producers’ strike. The organization’s Director for Trade and Agriculture recently stated: “Instead of shedding crocodile tears because of a slight decline in milk prices since last year’s records, the producers should dance for joy as prices are notably higher than those of two years ago.”
Notwithstanding the first negotiations between German milk producers and the retailers’ federation, the conflict intensifies and delivery blockades could impact some supermarkets supply.
In addition, the protest is spreading at various levels to other European nations: Belgium, The Netherlands, Austria and Switzerland. According to Sonja Korspeter, the European Milk Board (EMB) spokesperson, “the demands are identical for all milk producers: a fair base price for 2008, a pricing system based on production costs and more flexible volume regulations.”
The crisis also underlines the fears of dairy farmers facing a gradual increase of milk quotas and their planned suppression in 2015. Germany Agriculture Minister, Horst Seehofer, has taken the side of the farmers and indicated that the current policy is a “mistake” since it can emphasize lower milk prices.