Sharp contrast in EU consumer milk and farmgate prices

Average EU consumer milk prices had jumped 12 percent in the past one year, while farmgate prices languished at low levels.

The high consumer milk prices lasted until summer 2008, then fell by a mere two percent. In contrast, producer milk prices were halved, according to EU Agriculture Commissioner Mariann Fischer Boel.

Farmgate prices have dropped to a level below summer 2007, when the increases started, so consumer prices should have dropped more than two percent, she said.

Calling on retailers to come clean about the prices they charge consumers for fresh milk, Fischer Boel said recent falls in farmgate prices should have been passed onto the supermarket shelves.

If the retailers do not find a solution, the worse-case scenario is that the farmers would stop producing and the EU would have to turn to imports, said the farm chief.

She said it is important to have a transparent system so they can see where the added value is disappearing. 

In the past, Fischer Boel has complained that retailers tend to make consumers pay dearly for staple foods when world grain and dairy prices were high, but were slow to pass on savings when market prices declined. 

France, Austria and Germany said their dairy producers have been badly hit by weaker prices and want firm EU action to strengthen farmer incomes. They have tabled a series of requests, mostly involving hikes in aid to the dairy sector.