For those who would like to have an idea of the current imbalances in the dairy sector, simply take a look at the substantial gap between production costs and the farm-gate milk price. In France, producing a kilo of milk costs 52.54 cents, whereas the producer is only paid 33.33 cents (2019 figures drawn from the study “What is the cost of producing milk?".

Meanwhile, as part of its programme, the EU speaks of a “Farm to Fork” strategy and of a “Green Deal”. APLI members support the Green Deal and acknowledge its importance because the climate is the main element we work with and, needless to say, it directly affects all levels of our work: our soils, our animals and their feed. All of us are affected.

As such, the Green Deal is a laudable programme, but its implementation will be tricky without farmers! And at this rate, there won’t be many left, organic farmers included… Current organic milk production costs are considerably higher than those of conventional milk and there is a surplus of organic dairy products on the market while consumption is declining, which certainly isn’t making things any easier. This situation has obviously had an impact on the price paid to organic dairy farmers and has led Biolait to issue a communiqué calling on French households to purchase a carton of organic milk in order to rebalance a dangerously unbalanced market.

So: YES to going green, but the question is how, given all the red flags? Here again, the production costs induced by these changes need to be covered!

Spot some red flags? Stop now!

The system isn’t working: the rural fabric is tearing apart and contrary to public opinion, even organic farmers are struggling to keep their heads above the water, and we are all in the same boat: we are having a hard time finding young people to take over our farms while others are declaring bankruptcy. The diagnosis is there. It has been made by both farmers and economists, and by a few politicians who made the effort to take a serious look at these issues. Solutions? There are solutions! And we’ve been hammering away for twelve years if only to present and test them!

Regulating production and stopping exports when there is no added value, implementing cross-sectoral and cross-country producer organisations in Europe to give farmers a stronger voice in negotiations with dairies and retailers, supporting states in the creation of a real fair milk across Europe: this is what we have been pushing for.

The failure-diagnosis-solution combo has clearly been laid out and even a cost estimate has been put on the table. And yet, nothing has changed! At the other end, in the high spheres where those who “understand” and “manage” operate, it seems word about the system’s failure has not yet gone round as they continue to think and act based on age-old foundations that are collapsing under the current system, with discussion partners whose interests are light years away from those of farmers who, month after month, come to realise that they’ve been paid for their milk only after they’ve been milked for all their worth! When it comes to our solutions, our Minister of Agriculture refuses to hear us out even though these very solutions were worked out on his own turf. Whether we like it or not, we are the ones who know what it’s like on the field, and we must keep our spirits up and dig our heels in when faced with the keepers of this obsolete system. They all claim to defend a better future but neither of them is able to break the 10-cent seal keeping us from even having a future.

Adrien Lefèvre, President of the Association des Producteurs de Lait Indépendants (APLI)

The agricultural census conducted by the French Ministry of Agriculture every ten years gives us an overview of the French farming landscape and the trends inherent to ten-yearly developments across the country. Its latest publication on 10 December 2021 shows a 21% fall in the number of farms across all types of production.

Livestock farming is the sector most affected by this trend with a drastic decline: Between 2010 and 2020, the number of farms has decreased by 31%, which is a loss of 64,000 farms. As regards dairy farming more specifically, the situation is alarming: over a quarter of farms have closed down in France over a ten-year period, a whopping 13,000 farms.

A decrease in the number of livestock farms, along with herd decapitalisation

According to the French livestock-farming institute (IDELE), France was home to roughly 3.6 million dairy cows and 736,000 heifers in 2020, i.e. 8.2% and 15.1% respectively fewer than in 2015. According to the IDELE, this soaring herd decapitalisation is far from coming to an end. The institute has forecasted a sharp decline in the number of dairy cows: 441,000 by 2030, albeit with different regional dynamics. Some specific regions are strongly affected by this decrease, such as the Nouvelle-Aquitaine, where the number of cattle has dropped by 45% between 2000 and 2019, compared with 19% at national level. The number of producers in this region has also plummeted, from 8,700 in 2001 to 2,500 in 2019.

At national level, the situation is alarming: milk producers aged over 50 accounted for 32% of dairy farmers in 2010, compared with 48% today, with 28% of them being over 55 years of age. According to the IDELE, the replacement rate for dairy farmers is a mere 45%, far from the 71% average across all farming sectors.

The national accounts confirm this trend

The recently published national accounts confirm that 2020 was marred by difficulties for dairy farmers. With a comprehensive 1.2% increase in expenses in 2019 linked to the increase in labour costs (+12.1%), repair and maintenance expenses (+10.7%) and the farmer’s social security contributions (+12%), the economic results of dairy farms once again show a decline (-1.9% for added value and -2.4% for gross operating profit per self-employed farmer). Mountain farms have generally fared better thanks to a better valorisation of their production.

The earnings before tax (EBT) per self-employed farmer fell by a net 6.8% in 2020 to an average of 26,052 euros/FTE. When the overall characteristics of dairy farms were analysed in 2020, it was observed that their self-financing capacity dropped by 3.7%, while their fixed assets increased by 2.6% and were funded by debt, also up by 3.1%.

For the year 2021, the upward trend in raw material prices has jeopardized the margins of dairy farmers because it has not been offset with an increase in farm-gate milk prices. In fact, the agricultural means of production purchasing price index (Ipampa) for cow’s milk shows an 11.9% increase in costs over one year, with a surge in the purchase price of animal feed and energy prices.

Véronique Le Floc’h, Coordination Rurale, France

As you probably know dairy farmers in Ireland mostly have spring-calving herds with only approximately 10% calving all year round. This is to maximise the growing season of grass and means that our cows are out at grass over 300 days per year. Spring herds are currently preparing for the new calving season which usually starts in mid-January.

Our spring season usually means lower costs as fresh grass is the cheapest form of feed in Ireland. However, to maximise grass growth chemical and organic fertilizer is an important input in this system. Unfortunately, like all other farmers across Europe, the price of chemical fertilizer has increased dramatically in the second half of 2021, which means that availability is also tight. Dairy farmers are bracing themselves for significant higher costs in 2022 as concentrate prices have also risen. Weather is one factor that cannot be controlled, and the hope is that a mild spring will lead to good growing conditions easing some of the pressure on input costs.

Fortunately, Irish dairy farmers received ideal weather last autumn and early winter and cows remained out on grass for longer, resulting in the 2021 season finishing in favourable conditions before what all expect to be a challenging new year.

The milk price is currently between 41 and 42 cents per litre at 4.2% fat and 3.4% protein with all milk purchasers increasing prices for November. Further increases are expected for December prices that will be announced in mid to late January. Latest milk supply figures show that Ireland increased milk supply by 2.4% in October 2021 and cumulatively year to date is 6% up on 2020 supply.

Paul Smyth, Policy Officer, Irish Creamery Milk Suppliers Association (ICMSA)