Farmer's delegations from all over Europe have gathered today at an impressive protest in the heart of Brussels to call for fairness in the agricultural sector. Under the slogan “A fair income for farmers - NOW!”, the participants presented their demands to the EU Agriculture Ministers meeting today, to the European Commission, the European Parliament as well as to other agricultural associations. As an umbrella organisation for European dairy farmers from over 15 countries, the European Milk Board (EMB) organised this important protest in the lead up to World Milk Day and the European elections. The protesters came with life-size cows in their national colours - the Faironikas or Justines that symbolise the diversity and unity of the movement.

From 31 July, the Danish dairy farmers will lose their derogation permitting a maximum stocking rate of 230 kg N per hectare. After 22 years, the news hit dairy farmers out of the blue. On 10 April, the Ministry of Environment published a press release announcing that the cattle derogation would expire at the end of July 2024.

Even though adverts have been telling us for many years that ALL grocery chains in Norway are constantly lowering prices, food prices have actually risen steadily and significantly over the years.

The last four years have seen enormous consumer price increases despite the fact that the prices paid to farmers have only risen very modestly. Between 1985 and 2024, both the farm-gate milk price and the price we pay in a shop for a litre of whole milk have changed, see chart below.

In 1985, the farmers’ share of the retail price was 46.8%. In 2024, this figure is down to 21.9%. In 1985, the farm-gate price was 2.71 Norwegian kroner (NOK). 39 years later, it has increased to NOK 5.62. It might have doubled in almost 40 years, but the retail price went from NOK 5.79 to NOK 25.70 over the same period – an increase of 343%.

The distribution of "milk money" has changed considerably over the last 40 years. There are two links between farmers and retail customers. The dairies – essentially the TINE system (cooperative of Norwegian dairy farmers) – constitute the link that collects the milk from farms, processes it and transports the final products to the shops. Of course, they have to get paid for this, and the income of those who work in this part of the sector pretty much follows wage trends in the rest of the business world.

Grocery chains sell the products in their shops and basically have two tasks: to transport milk and other products from their warehouses to their shops and to take payment from consumers at the till. The greater share of product costs in the dairy sector are incurred after the milk leaves the farm. As a result, the milk price increases by almost 20 kroner from the moment it leaves the farm to the time we put it in our shopping carts as consumers.

Lack of transparency

It seems impossible to figure out how revenue is distributed between dairies and grocery chains. The retail chains have been allowed to manage matters in such a way that no information is available on how much they pay to have a litre of milk in their shops. This is to maintain competition between the chains. The Norwegian Competition Authority (which now also includes the Norwegian Pricing Authority) has signed off on this lack of transparency.

In the open society we wish to live in, it is high time for us to have insight into such matters. When you see the food retailers rolling in cash while claiming that they have low profit margins on foodstuffs produced – among other places – in Norway, the demand to see the full accounts is more than justified. Both farmers and consumers may well be the losers in this game, which is carefully calibrated by the few who control virtually all food sales in this country.

TINE: a key player in the Norwegian dairy market

TINE is a big player owned by Norwegian farmers. It is therefore logical that the owners should know at what prices their company is selling their products. It must also be known how much the retail chains are charging individual suppliers for shelf space. How much does TINE have to pay to get the chains to sell their products?

In addition to TINE, there are some other intermediate links between farmers and grocery chains. For consumer milk, you have the private dairies Q-Meieriene and Rørosmeieriet. The latter buys its raw material from TINE. The Q dairies have two facilities in Gausdal and Jæren, which have contracts with selected farms from which they source their milk. 75 farms deliver to Gausdal and 220 farms to Jæren. In total, these farms have 14,000 cows, an average herd size of almost 50 cows. This is a high average by Norwegian standards, and there is reason to believe that these dairies therefore benefit from cost-effective milk transport from large farms that are relatively close to the dairy.

As a market regulator, TINE is obliged to collect milk from all farmers who wish to supply (regardless of size and geographical location of the farm). By the same vein, TINE is also obliged to supply all shops that wish to sell these products (again, regardless of size and geographical location). This creates additional costs for TINE that the other dairies do not have to bear and is a crucial point in the current debate about market regulation. This system ensures that we can produce food throughout the entire country and have access to these products from North to South. It is worth mentioning that farmers must be guaranteed a decent income they can live on as well as most other groups in society!

It is time to debunk the 'truth' that grocery moguls try to sell us, i.e. that lower prices in their shops mean lower prices for customers. Grocery chains charge whatever the market is willing and able to pay. The farmer’s modesty while negotiating target prices has only meant that the Reitan family, the Johansson family and the bosses at COOP are able to make common cause.

Even Erlien, Leif Langen, Trond Langen and Arnfinn Nergård, Board Members, Bondesolidaritet

After 2022 where revenue on dairy farms was higher than production costs - a first in many years - 2023 saw a return to less viable times. On average, the cost coverage shortfall, i.e. the difference between production costs and revenue, was 6.7 cents per kg. This was mainly due to the reduction in milk prices while production costs remained stable at about 59 cents per kg including target remuneration for producers.

The most recent General Assembly of the European Milk Board asbl focused on the young generation of farmers. Dairy farmer delegations from across Europe discussed how to make the sector profitable again in order to attract young people towards agricultural production. Committed young farmers contributed to this emotional discussion with impressive speeches and presentations. The question “What is important for young farmers?” was at the heart of the lively, constructive debate, where the young participants explained their priorities and points of view. Furthermore, Pierre Bascou, Deputy Director-General of DG Agriculture and Rural Development, accepted the EMB’s invitation and attended as a representative of the European Commission. He talked to the General Assembly about the EU’s recent young farmers strategy as well as about measures to improve the producer position.