Germany: Organic milk producers still making a loss
In the financial year 2023/24, the production cost for organic milk in Germany was around 68.53 eurocent per kg. That was some 0.11 cents per kg more compared to the previous 12 months. Nevertheless, the average price producers received only covered 81% of those production costs, the German Milch Board reports.
“We’re still missing some 13 cents per kg to cover all our costs for organic milk,” said chairman Frank Lenz, who has an organic dairy farm in Saxony-Anhalt.
In the calculations, recent increases in labour costs are included. “For labourers, that means more money, but us milk producers can’t afford that increase in our costs because we don’t earn enough money. Over the last 5 years, after paying all the bills, we were on average 10 cents per kg short. That’s without taking into account the minimum pay. If we include that, it’s more like 24 cents per kg,” said Lenz. “This gap of 42% will undoubtedly lead to the shrinking of businesses and the deferring of investments that are necessary to make our farms future-proof.”
“Very bad milk prices”
“Politicians and society are asking for the transformation of agriculture and a higher share of environmentally friendly farming. In reality, the development goes in the opposite direction. Many organic farmers are returning to conventional methods or stopping altogether with the production of milk. The very bad milk prices are the main reason. With these low payments and the investments stopping, the younger generation are rightly asking whether it’s worth considering organic milk production.”
For many years, around a fifth of the production costs have been not covered, the German Milch Board noted. Organic producers have not profited from recent phases of increasing milk prices either.
Urgent action is needed
Lenz added: “Urgent action is needed here. We shouldn’t just have to pay our costs. We should also be able to earn a decent living to secure a future for organic milk production. In our sector, too, production costs should be a factor in price negotiations. To achieve that, we need a stronger market position for the milk producer and stronger cooperation in the dairy communities, which should be in a position to negotiate prices, mixes and delivery conditions for our milk.”
