March 13, 2008

High milk prices in EU to sustain dairy farmers' robust production

The high prices for raw dairy milk in the EU market have driven farmers to increase production and meet the growing demand.

The USDA reported that despite a projected 0.9 percent fall in EU dairy herd sizes in 2007, high prices of milk products and improved production quotas are cushioning declines in the industry.

Dairy herds are already expected to expand in a number of markets like Germany, the Benelux, the Iberian Peninsula, with particularly strong turnarounds in newer member states like Poland, the USDA said.

Amidst concerns that cattle herds will face a steady decline in the most part of 2008, price improvements and the proposed two percent hike in milk production quotas will see more farmers in newer member states like Poland turning to cow farming.

The USDA said that the general trend would revive the dairy and beef sector in the EU.

The estimated higher number of cows available is said to be the result of a growing number of farmers holding on to their dairy cows, and improvements in the number of young calves and heifers assigned to produce milk, the USDA explained.