(Brussels, 16 October 2023) According to the quarterly update of the cost study established by the Farm Economics and Rural Studies Office (BAL), milk production costs in Germany amount to 49.73 cents per kg (as of July 2023). With 46.87 cents per kg, costs were at a lower level in April 2023. The average farm-gate milk price fell significantly and was only 40.63 cents per kg in July 2023. In January, the price still amounted to 56.93 cents and in April to 45.11 cents. For July, the price/cost ratio shows a shortfall of 18 percent, which is a 37-point drop compared to January, when cost coverage was still 119 percent. 

The European Milk Board is calling for the activation of a voluntary volume reduction scheme at EU level in order to achieve stable prices on the dairy market with the help of minor temporary reductions in milk volume.

Data sheet (July 2023)

Development of milk production costs in Germany

Here you have the evolution of German milk production costs from 2014 to July 2023.

Price/cost ratio

The price/cost ratio illustrates to which extent milk prices cover the cost of production. In July 2023, milk prices did not cover the cost of production. The shortfall was 18%.
Here you see the evolution of the price/cost ratio since 2014.

Milk Marker Index (MMI)

The Milk Marker Index (MMI) represents the evolution of milk production costs. In July 2023, the MMI was at 121, i.e. production costs for German dairy farmers had risen by 21% as compared to the base year 2015 (2015 = 100).
Here you see the evolution of the Milk Marker Index over time.

Study on organic milk production costs

In November 2019, a study on the cost of production of organic milk in Germany was published (period: 2011/12 to 2018/19). You can find this study here as well as current data for 2021/22 here.

Study on milk production costs in eight key milk producing countries 

Cost calculations are regularly carried out in Germany but also in seven other countries.
The 2019 study on milk production costs in Belgium, Denmark, France, Germany, Ireland, Lithuania, Luxembourg and the Netherlands is available here. You can find an update for 2021 with an outlook for the first quarter 2022 here.

A chronic shortfall between production costs and milk prices – what is the solution?

The European Milk Board promotes a legally-anchored crisis instrument to counteract the chronic cost shortfall. The Market Responsibility Programme (MRP) observes and reacts to market signals by aligning production.
Here you have a short description of the EMB's Market Responsibility Programme.
 

Contact: office[at]europeanmilkboard.org