According to the quarterly data published by the Rural Sociology and Agriculture Office (BAL), producers in Germany are short 9.51 cents per kg to cover their cost of production.
In July 2021, producers only recovered 79% of their production costs from the milk price, leaving a shortfall of 21%. The price/cost ratio illustrates to which extent milk prices cover the cost of production.
Also in July, the Milk Marker Index (MMI), which represents the evolution of milk production costs, was at 110. This means that production costs for German dairy farmers had risen by 10% as compared to the base year in 2015.
Cost calculations are carried out in Germany on a regular basis. They’re also carried out in seven other European countries. They as well clearly show that the prices paid to milk producers do not cover the cost of production.
EMB compiled a report on the true cost of producing milk in Europe. Numbers are available for eight European countries: Belgium, Denmark, France, Germany, Ireland, Lithuania, Luxembourg, and the Netherland. The report was completed in 2019.
The European Milk Board promotes a legally anchored crisis instrument to counteract the chronic cost shortfall. The Market Responsibility Programme (MRP) observes market signals and reacts to them by aligning demand and production.