Uncover the dynamics behind New Zealand’s record $5.4 billion in exports to the U.S. Delve into the factors driving this growth, from robust demand to the depreciation of the kiwi dollar.
With an 8.9% rise from the year before, New Zealand’s exports to the United States have jumped to an extraordinary NZ$8.8 billion ($5.4 billion). High demand for New Zealand’s goods and a reasonable exchange rate—the Kiwi currency dropping 3.3% versus the US dollar—drive this increase. “The strong market demand and currency shifts have bolstered New Zealand’s export potential,” said an expert from Statistics New Zealand. American customers have looked for goods like meat, dairy products, and wine. On the other hand, relationships with other vital allies like Australia have displayed different patterns.
Shifting Horizons: New Zealand’s Strategic Diversification in Global Trade
Geographic remoteness and great agricultural and marine resources have dramatically influenced New Zealand’s export scene. Originally primarily dependent on the British market, the country today boasts a varied export portfolio, including China, Australia, the United States, Japan, and the European Union, and engages essential trade partners.
Driven by strong demand for dairy, beef, and lumber, China has become New Zealand’s top export destination. With exports topping NZ$10 billion by 2018, the 2008 free-trade deal between New Zealand and China, which eliminated tariffs on many goods, spurred this expansion.
Australia is still a critical economic partner because of the Closer Economic Relations (CER) trade deal signed in 1983. Notwithstanding current volatility, which includes [specific examples of volatility], the geographical closeness and bilateral solid relations guarantee continuous commerce in food items, manufactured goods, and equipment.
From the 1980s to the late 2010s, trade with the United States has changed progressively. However, a recent trend shows growing demand for New Zealand’s luxury food and beverage exports, especially wine, dairy, and meat.
New Zealand constantly changes its export plans to maintain economic resilience and reduce market volatility. This is particularly clear in the global financial crisis when diversification has proven essential. The increase in U.S. exports highlights a calculated attempt to enter the American solid market at advantageous exchange rates, which involved proactive engagement with American buyers, leveraging favorable trade agreements, and capitalizing on the consumer demand for premium-quality products.
Economic Catalysts: The U.S. Market’s Robust Demand and Kiwi Dollar Depreciation
Many economic factors have spurred the rise in New Zealand’s exports to the United States. Most importantly, the strength of the American economy has contributed to this. Over the last year, the United States has enjoyed rising consumer expenditures, industrial expansion, and a strong employment market, driving demand for premium imports like those from New Zealand.
Furthermore, the devaluation of the New Zealand currency has improved its export competitiveness. With the Kiwi currency depreciating 3.3% versus the US dollar, New Zealand products have been more reasonably priced for US consumers, increasing demand.
The attraction of New Zealand’s primary export goods—wine, dairy, and meat—has produced a welcoming trading climate. This synergy between a robust U.S. market and advantageous exchange rates shows New Zealand’s export performance.
Contrasting Fortunes: U.S. Growth, Australian Decline, and China’s Dominance
The image of New Zealand’s exports shows complexity. Thanks to American robust demand and the devaluation of the Kiwi currency, exports to the United States reached a record NZ$8.8 billion, an 8.9% rise over last year. By contrast, exports to Australia dropped 2.4%, falling from a mid-year record of NZ$9.1 billion to NZ$8.7 billion, mainly owing to lower demand for industrial items such as mechanical gear. With sales of NZ$17.9 billion, China still ranks New Zealand’s biggest export market. This varied export performance emphasizes how urgently strategic adaptability is needed in New Zealand’s trade strategies.
Quality Drives Demand: Wine, Dairy, and Meat Propel New Zealand’s Record-Breaking U.S. Exports
New Zealand’s record exports to the U.S. are powered mainly by high demand for wine, dairy products, and meat. These products align well with U.S. consumer preferences and market needs.
Wine exports have surged by 38% over the past year. New Zealand’s Sauvignon Blanc and Pinot Noir are highly acclaimed for their quality, benefiting from the country’s unique climate and soil, which appeal to discerning U.S. consumers.
Dairy products have seen increased demand due to their high quality and nutritional value. New Zealand’s grass-fed dairy aligns with the preferences of health-conscious and organic-seeking U.S. consumers. The country’s strict farming practices ensure the purity of its products.
Meat exports are thriving thanks to U.S. demand for premium lamb and beef. New Zealand’s free-range, grass-fed livestock practices produce flavorful, ethically, and sustainably sourced meat that appeals to American consumers.
The Kiwi dollar’s decline against the U.S. dollar boosts New Zealand’s export competitiveness, making its quality products more affordable for American buyers.
Seasonal Synergy: The Summer Surge Behind New Zealand’s Export Peaks
Given the particular environment of the southern hemisphere, New Zealand’s export numbers are much shaped by seasonal elements. From December to February, the summer of New Zealand marks the maximum fruit and vegetable harvest. May has become a vital export month, falling after harvest and the beginning of the world shipping season. This scheduling guarantees that exports such as apples and kiwifruit arrive at markets fresh, increasing quantities and value. The summer also improves crop quality, which appeals to foreign consumers of New Zealand’s goods.
Beyond agriculture, summer supports viticulture, among other industries. Strong grape yields and ideal harvesting circumstances in the summer months help the wine business. Therefore, May observed a boom in wine exports, which helped explain the increase in exports. Although the summer temperature less affects dairy and meat products, the favorable agricultural surroundings increase general production and effect. The record-breaking export numbers in May reflect this seasonal synergy, which emphasizes the critical part seasonal elements play in the export dynamics of New Zealand.
The Bottom Line
The record NZ$8.8 billion exports to the United States best captures New Zealand’s nimble trade approach. Driven by American steady demand and the devaluation of the Kiwi currency versus the U.S. dollar, this milestone emphasizes New Zealand’s capacity to exploit economic circumstances. Premium wine, dairy, and meat goods from New Zealand appeal especially to American consumers. On the other hand, declining Australian consumption and China’s relentless supremacy expose changing patterns in New Zealand’s export markets.
New Zealand is poised to profit from its strong trade links and quality products. Particularly in the southern hemisphere summer, seasonal maxima will keep increasing export quantities. Maintaining competitiveness, however, will depend on being alert about changing consumer tastes in essential areas such as China, Australia, and the United States, as well as monetary change. Stressing quality and strategic orientation will also be crucial to maintaining and surpassing these record export levels.
Key Takeaways:
New Zealand’s exports to the United States reached a record NZ$8.8 billion ($5.4 billion) in the 12 months through May, marking an 8.9% increase from the previous year.
While the U.S. market surged, exports to Australia experienced a decline of 2.4% year-over-year to NZ$8.7 billion.
China maintains its position as New Zealand’s largest export market, with NZ$17.9 billion in sales, accounting for 26% of total exports.
The usability of the kiwi dollar played a crucial role, as its 3.3% decline against the U.S. dollar enhanced the competitiveness of New Zealand goods in the American market.
May alone witnessed record-breaking exports of NZ$7.2 billion, with the U.S. accounting for NZ$1.02 billion due to high demand for wine, dairy products, and meat.
New Zealand’s export numbers typically peak in May, aligning with the end of the southern hemisphere summer and the height of the fruit and vegetable season.
Summary:
New Zealand’s exports to the United States have reached an impressive NZ$8.8 billion ($5.4 billion), driven by high demand for its goods and a reasonable exchange rate. This growth is attributed to strong market demand and currency shifts, as American customers are seeking meat, dairy products, and wine. New Zealand’s strategic diversification in global trade is influenced by its geographical remoteness and great agricultural and marine resources. The country has a diverse export portfolio, including China, Australia, the United States, Japan, and the European Union, and engages essential trade partners. China has become New Zealand’s top export destination due to strong demand for dairy, beef, and lumber. Australia remains a critical economic partner due to the Closer Economic Relations (CER) trade deal signed in 1983. New Zealand constantly changes its export plans to maintain economic resilience and reduce market volatility, particularly during the global financial crisis when diversification is essential.
EU deadlock: Poland and Hungary block gene-editing rule changes. Will this delay in legislation impact small producers and the future of sustainable agriculture?
A deadlock has developed when it looked like the European Union may update its rules on gene-edited crops. Due to a controversial patent exclusion for genetically modified seeds, Poland, Hungary, and other countries have halted attempts to change new genomic technologies (NGT) laws.
The EU’s failure to agree hinges on critical issues:
Patented NGT seeds potentially limit access for smaller producers.
Fears of looser regulations for NGT compared to traditional GMOs.
Concerns over ecosystem stability and public health.
Balancing Innovation and Oversight: The EU’s Struggle with Gene-Editing Regulations
The EU is currently grappling with balancing innovation and oversight in gene-editing regulations. Under its present rules, the EU treats gene-edited crops under the same rigorous control as conventional genetically modified organisms (GMOs). Handling environmental and health issues entails thorough safety evaluations, traceability, and labeling. The 2018 European Court of Justice decision verified that mutagenesis-derived organisms are GMOs legally.
Beyond conventional genetically modified organisms (GMOs), new genomic techniques (NGT) provide a scientific breakthrough. NGTs like CRISpen-Cas9 alter an organism’s DNA precisely, unlike genetically modified organisms (GMOs), which introduce alien DNA. This allows features that may take longer to develop.
Proponents of NGTs envision a revolution in agriculture, with crop varieties that require fewer pesticides, resist climate change, and have enhanced nutritional profiles. The promise of drought-resistant crops and consistent yields in challenging conditions offers hope for meeting growing food demands and environmental stress, instilling a sense of optimism in the audience.
NGTs are not immune from debate, either. Critics note the possible long-term environmental and health hazards and contend that accidental alterations might still occur. They also draw attention to the socioeconomic concerns, especially the fairness of smaller growers’ access to patented NGT crops.
Nuanced Propositions and Fragile Alliances: Belgium’s Strategic Draft for NGT Regulations
Vital talks characterized the latest attempt to change the suggested rules on gene editing. Belgium’s updated draft sought to separate New Genomic Techniques (NGT) from Genetically updated Organisms (GMOs), providing a unique road forward. This method underlined the possible advantages of NGT and suggested that patented NGT seedlings follow strict GMO rules. This answered worries about market monopolization and accessibility for small farmers. However, the proposed amendments would not pass due to a lack of agreement and worries over patent consequences, underscoring the difficulties in modernizing the EU’s legislative environment for sophisticated agricultural technology.
Poland, Hungary, and the Battle for Equitable Access to Gene-Editing Technology
Concerns about patenting NGT seeds lead Poland, Hungary, and other nations to reject the loosened gene-editing policies. They contend that patents would benefit big agrochemical companies and hurt small—and medium-sized growers, generating monopolies or oligopolies in the seed industry. This would restrict the capacity of smaller farmers to utilize and grow these seeds, whatever they like.
Patenting also raises questions about whether it would raise seed prices, making modern biotechnologies unaffordable for smaller producers. Such expenses might aggravate agriculture sector disparities when smaller companies fight against more large-scale businesses. Critics contend that without protections, the law would widen gaps rather than encourage general access to innovation.
Poland and Hungary support strict rules guaranteeing that NGT seeds—even if patented—remain available and reasonably priced. They advocate equitable licensing rules to stop monopolistic dominance and ensure that technical developments help not just a small number of farmers but all. They contend that democratizing access to NGT and promoting thorough agricultural development all over the EU depends on resolving these issues.
The Far-Reaching Consequences of the EU’s Impasse on Gene-Editing Legislation
The debate over gene-editing rules delays the acceptance of new guidelines for at least a year. Notably, smaller and European seed companies suffer significantly from this delay; thus, new genomic technologies (NGT) might be beneficial.
EU businesses need consistent rules to be internationally competitive. While European companies fight strict regulations, foreign peers develop quickly, running the danger of a brain drain of experts and stifling EU innovation.
Finding imported NGT items also becomes difficult. Traditional GMO checks fail as NGT may alter genes without foreign DNA, opening the EU to uncontrolled NGT products and compromising its standards.
Ultimately, the deadlock renders the EU’s attempts to preserve control and security ineffective. Delaying explicit NGT policy threatens to leave the EU underperforming in biotechnology, undermining its agriculture sector and regulatory aims and forfeiting the advantages of hardy crops.
Supporters Laud NGT’s Potential to Revolutionize Agriculture Amid Rising Concerns Over Safety and Ecological Impact
Advocates of new genomic technologies (NGT) are quick to highlight their transformative potential. They argue that NGT has the power to significantly increase agricultural yields and reduce pesticide usage, thereby benefiting both farmers and the environment. Cesar Gonzalez of Euroseeds notes, “NGT accelerates the natural mutation process, leading to the development of drought—and pest-resistant crops that could significantly enhance food security and sustainability.”
However, amidst the hope, there is also uncertainty. Environmental organizations, among others, express concerns about the potential long-term effects of gene editing on ecosystems and biodiversity. An expert warns, “NGT, like traditional GMOs, carries the risk of unexpected consequences, and rushing could pose ecological dangers.” This cautionary note is intended to make the audience aware of the potential risks.
Health issues also feed the argument. Experts warn that gene-edited crops might enter only the food chain with appropriate safety checks and tight rules. “We need a strong framework to evaluate health risks,” a consumer safety official notes. Only strict control can guarantee these innovations don’t endanger public health.”
This division emphasizes the intricacy of the problem. Although supporters of sustainable agriculture believe NGT is essential, detractors warn of risks. As the EU negotiates these interests, uncertainty hangs.
The Bottom Line
Explicitly using new genomic technologies (NGT), the European Union disagrees with gene-editing guidelines. Countries like Poland and Hungary resist the amendments even after the wording has been changed to solve issues with equitable access to patented seeds, therefore generating a stalemate. This deadlock prevents rules from relaxing, which would advance agricultural technology from where it stands. Without alignment, particularly with Poland and Hungary likely heading the EU’s rotating presidency, progress on gene-editing law stumbles. While complicating the identification of imported NGT goods, the delay prevents possible advantages like lower pesticide usage and improved crop resilience. Unlocking the full possibilities of gene-editing technology and guaranteeing justice and safety depend on a balanced legislative framework.
Key Takeaways:
EU governments failed to break a deadlock on relaxing regulations for gene-edited crops.
Countries like Poland and Hungary rejected changes that would exempt patented seeds from the new measure.
The modified text aimed to segregate NGT from traditional GMO regulations while maintaining strict rules for patented NGT seeds.
Without a qualified majority, the proposal was withdrawn from the agenda, delaying any legislative progress.
Advocates argue NGT accelerates natural mutations, while critics fear it poses risks similar to GMOs.
The impasse may delay legislative approval by at least a year because of opposition from Poland and Hungary during their upcoming EU presidency.
The challenge of identifying NGT-developed products without foreign DNA could impact EU’s regulatory landscape.
Summary:
The European Union (EU) is grappling with the balance between innovation and oversight in gene-editing regulations. Current rules treat gene-edited crops under the same rigorous control as conventional genetically modified organisms (GMOs). New genomic techniques (NGT) provide a scientific breakthrough, altering an organism’s DNA precisely, unlike GMOs, which introduce alien DNA. Proponents of NGTs envision a revolution in agriculture with crop varieties that require fewer pesticides, resist climate change, and have enhanced nutritional profiles. However, critics note potential long-term environmental and health hazards and concerns about accidental alterations. Socioeconomic concerns, particularly the fairness of smaller growers’ access to patented NGT crops, also draw attention. Belgium’s updated draft sought to separate NGT from GMOs, but the proposed amendments would not pass due to a lack of agreement and worries over patent consequences. The debate over gene-editing rules delays the acceptance of new guidelines for at least a year, significantly affecting smaller and European seed companies.
Explore how record cheese exports and changes in China’s demand are impacting the US dairy economy in 2024. Will the industry continue to grow despite global challenges?
The U.S. dairy industry will start strong in 2024. The industry is hopeful and wary, given record-breaking cheese exports and shifting Chinese demand. “Record exports and increased domestic demand are positive,” Kathleen Noble Wolfley from Ever.Ag said, noting the encouraging patterns. These elements are guiding the American dairy industry toward a year of promise.
Positive Trends Amid Challenges: U.S. Dairy Economy Sees Record-Breaking Cheese Exports and Bolstered Domestic Demand
With record-breaking cheese exports of 75 million pounds and a 15% increase in domestic demand, the U.S. dairy business shows good trends despite obstacles. Cheese exports increased by 75 million pounds over the previous year, currently reaching markets in Mexico, South Korea, and Japan. Kathleen Noble Wolfley from Ever.Ag observed that this change relieved the domestic pricing pressures projected in 2023.
Mexico stands out by buying 35% of U.S. cheese exports. This solid demand worldwide and higher local consumption are driven by extensive brand campaigns, which provide a balanced market situation.
Looking forward to the remainder of 2024, these patterns indicate a bright future for the American dairy sector despite possible obstacles. Study more.
Unpredictability in Key Export Markets: The Emerging Challenges in China and Mexico
Export market concerns are intensifying in China and Mexico, where unpredictability is rising. Political developments in Mexico and a depreciated peso are complicating exports. This devaluation of money throws additional doubt on the commercial relationship, potentially leading to reduced purchase volumes and increased competition in other markets, exacerbating pressures on U.S. surplus management and pricing strategies.
China’s lower imports have meanwhile upset predicted market stability. According to reports, China could soon start exporting, intensifying rivalry and forcing American dairy farmers to seek fresh markets for expansion through [specific strategies].
Increasing Global Competition: Navigating the Challenges Posed by Decreased Shipping Costs and Strategic Trade Agreements
The growing competitiveness of other dairy-exporting nations resulting from lowered transportation costs adds to the complexity of the U.S. dairy export business. This allows nations such as Australia, New Zealand, and the European Union to present their dairy goods at more reasonable rates through strategic pricing, advanced logistics, and favorable trade agreements.
These nations’ speedier and cheaper delivery of goods, made possible by logistically efficient systems, disadvantages American exports. Furthermore, their good trade deals with China suggest that American manufacturers might find it difficult to maintain their market dominance in this vital area.
Further complicating the scene is China’s possible change in dairy import preferences depending on price and supply dependability. To be competitive in a market going more and more price-sensitive, U.S. exporters must continually innovate or cut prices.
Retail and Foodservice Boost: The Dynamic Role of Domestic Cheese Demand in the U.S. Dairy Economy
The U.S. dairy business is greatly affected by the growing domestic demand for cheese, particularly in the retail and catering industries. Major corporations are luring more customers with creative marketing, such as customized digital campaigns targeting specific demographics, and appealing discounts, such as buy-one-get-one-free offers. Restaurants have also ingeniously included cheese on their menus, driving more consumption.
The higher demand might raise cheese prices. Promotions drive regular customer purchases that rapidly deplete stocks and call for more manufacturing activity. Complicating the situation are “rolling brownouts” brought on by bovine influenza A in dairy manufacturing.
Sustained strong demand might drive cheese prices higher, causing stores to cut discounts to protect profit margins. This could lead to
shifts in consumer purchasing behavior, potentially decreasing overall cheese consumption as higher prices push budget-conscious shoppers toward more affordable alternatives. This delicate dance between maintaining market attractiveness through promotions and responding to the economic realities of supply and demand underscores the complex and dynamic character of the dairy market in 2024.
Assessing the Current Landscape: Production Challenges and Market Dynamics in the U.S. Dairy Industry
The U.S. dairy economy, though consistent, has experienced a slight drop in output compared to previous years. A significant factor contributing to this decline is Bovine Influenza A, often referred to as avian influenza in cows. This disease exacerbates the reduction in production, leading to what experts call “rolling brownouts”—periods of lowered output in affected herds. Typically, these rolling brownouts result in a 10% decline in milk production for about two weeks, followed by a recovery period of another two weeks.
Another major problem is the great expense and unavailability of heifers necessary for herd replenishment and expansion. This restricted availability tightens the milk supply and poses significant challenges for farmers hoping to increase their activities. These production difficulties draw attention to the intricate dynamics in the American dairy sector, which calls for farmers’ resilience and flexibility.
Forecasting Futures: Navigating Price Volatility and Strategic Planning for the U.S. Dairy Industry’s Year-End
Ever.Ag projects Class III futures ranging from $18 to $20 per hundredweight and Class IV ranging from $20 to $22 for the remainder of 2024. These forecasts suggest a cautiously optimistic outlook for the U.S. dairy industry, indicating potential price stability and favorable margins for producers. However, market volatility still poses significant challenges even with these hopeful forecasts. “We will continue to see volatility in these markets,” Kathleen Noble Wolfley notes, emphasizing the necessity of strategic planning as the year progresses. She also underscores the need for awareness and flexibility, advising industry stakeholders to remain vigilant and adaptive in response to rapid market shifts.
The Bottom Line
Despite the challenges, the U.S. dairy industry, buoyed by record cheese exports and increased local demand, is poised for a promising 2024. The industry’s resilience in navigating the erratic nature of key markets like China and Mexico, along with the ability to manage reduced herd growth and illness effects, instills confidence in its stakeholders. The key to success lies in adapting to these changing dynamics for strategic orientation and maintaining good margins.
Key Takeaways:
Record U.S. cheese exports in the initial months of 2024 have helped alleviate domestic market saturation.
Increased domestic demand for cheese in both restaurants and stores is buoying the market.
Key export markets like China and Mexico are becoming less predictable due to political and economic fluctuations.
Decreased shipping costs may result in increased global competition, potentially undercutting U.S. dairy prices.
Bovine influenza A is causing intermittent declines in milk production, further tightening the already constrained supply.
The high cost and limited availability of heifers are hindering farmers from expanding their herds.
Ever.Ag forecasts continued market volatility, with class III futures expected between $18 and $20 per hundredweight, and class IV between $20 and $22.
Summary:
The U.S. dairy industry is expected to start strong in 2024, driven by record-breaking cheese exports and a 15% increase in domestic demand. However, the industry faces challenges such as unpredictability in key export markets like China and Mexico, which may lead to reduced purchase volumes and increased competition in other markets. The growing competitiveness of other dairy-exporting nations adds complexity to the U.S. dairy export business. Domestic cheese demand plays a significant role in the U.S. dairy economy, with major corporations attracting customers through creative marketing and attractive discounts. However, higher demand might raise cheese prices, leading to stores cutting discounts to protect profit margins. This could lead to shifts in consumer purchasing behavior, potentially decreasing overall cheese consumption. Despite these challenges, the U.S. dairy industry is poised for a promising 2024, with resilience in navigating key markets, managing reduced herd growth, and adapting to changing dynamics for strategic orientation and maintaining good margins.
Explore the intricate world of top dairy producers and their unique farming methods. Interested in understanding dairy traditions across the globe? Immerse yourself in our detailed analysis.
Every June, we honor Dairy Month, recognizing the profound global influence of dairy farming. From delivering essential nutrition to underpinning economic stability for millions of farmers, dairy farming is a cornerstone industry that intertwines time-honored traditions with state-of-the-art advancements, molding communities across the globe.
Join us in a journey around the world as we delve into the remarkable facets of dairy farming, highlighting the innovative techniques and treasured customs that epitomize the unique methodologies inherent to each region.
Country
Annual Milk Production (Million Tons)
Trend
India
195.0
Increasing
United States
99.2
Stable
European Union
154.0
Decreasing
New Zealand
21.3
Stable
Brazil
35.0
Increasing
China
32.0
Increasing
Australia
9.0
Decreasing
Russia
31.4
Stable
Canada
9.7
Stable
The Pinnacle of Modern Dairy Farming: An In-Depth Look at the United States
Aspect
Details
Total Milk Production
Approximately 223 billion pounds annually
Leading States
California, Wisconsin, New York, Idaho, Texas
Primary Breeds
Holstein, Jersey, Guernsey
Average Herd Size
About 300 cows per farm
Production Systems
Combination of pasture-based and confinement systems
Technological Integration
Utilizes advanced milking machines, precision farming, and data analytics
Environmental Initiatives
Focus on reducing carbon footprint, water conservation, and manure management
Economic Contribution
Significant contributor to GDP, employment, and rural development
Export Markets
Primarily Mexico, Canada, and Asia-Pacific regions
Challenges
Climate change, fluctuating market prices, maintaining herd health
As we delve into the rich tapestry of global dairy farming, it’s imperative to understand the evolving trends that shape this vital industry. By examining data on dairy production across various countries, we can appreciate the diverse methods and scales of operation that contribute to the global dairy supply. Below is a table highlighting significant dairy production trends from several leading dairy-producing countries worldwide.
As we commemorate Dairy Month, it is only fitting to delve into the dynamic world of dairy production, revealing the key players in the global dairy industry and the prevailing trends shaping their practices. This exploration not only highlights the achievements of these countries but also shines a light on the diverse approaches they employ in maintaining and advancing dairy farming traditions. Our journey begins with a closer look at dairy production trends around the world, as illustrated in the table below:
The scale of dairy production in the United States is impressive, positioning the nation as a global leader in milk and dairy products. This vast industry combines modern farming techniques, technological advancements, and sustainability practices. States like California, Wisconsin, New York, and Idaho are vital players, contributing significantly to the national dairy output.
In California, the largest milk-producing state, farms use automated milking systems and advanced breeding techniques for maximum efficiency. Wisconsin, known as “America’s Dairyland,” integrates technology in feed management and animal health monitoring. New York and Idaho also employ precision agriculture and data-driven decision-making to manage resources sustainably and reduce ecological impact.
Family-owned farms are vital to the U.S. dairy sector, representing a significant portion of the industry. These farms adopt new technologies and sustainable practices, including methane digesters to convert waste into renewable energy and soil health management strategies. The commitment of these family-run operations to both production quality and environmental stewardship exemplifies the efficiency and sustainability of dairy farming in the United States.
The Harmonious Symphony of Tradition and Sustainability: An Exploration of India’s Dairy Farming
Aspect
Details
Annual Milk Production
Over 200 million metric tons
Global Ranking
Largest milk producer in the world
Primary Breeds
Indigenous breeds like Gir, Sahiwal, Red Sindhi, and crossbreeds
Major Milk Producing States
Uttar Pradesh, Rajasthan, Gujarat, Madhya Pradesh, and Andhra Pradesh
Common Dairy Products
Milk, ghee, butter, yogurt, paneer, and buttermilk
Contribution to GDP
Around 4% of the national GDP
Employment
Supports around 70 million rural households
The world’s largest milk producer, India leads global dairy farming through vast output and rich traditions. Unlike Western mechanized farms, India’s dairying is mostly family-run, with cattle forming part of the household.
Indian dairy farming often uses resilient indigenous breeds like Gir, Sahiwal, and Red Sindhi. Though these breeds are less high-yielding than hybrids, they offer a sustainable approach suited to India’s diverse ecosystems. Farming practices center on organic methods, minimizing synthetic inputs, and promoting eco-friendliness and social equity.
Small-scale farms are critical to India’s dairy success. Cooperatives like Amul play a pivotal role, empowering rural farmers by pooling resources and sharing profits, benefiting even the most minor contributors. These cooperatives, exemplify the power of collective effort in fostering sustainable and innovative dairy farming practices.
Dairy’s cultural importance in India is profound. Products like ghee and paneer are culinary staples and hold ritualistic significance. Ghee, used in cooking, medicine, and ceremonies, and paneer, a versatile, fresh cheese, integrate dairy deeply into daily life and festive traditions.
The European Union: A Mosaic of Diverse Dairy Farming Practices
Country
Milk Production (Million Tons)
Key Dairy Products
Noteworthy Practices
Germany
32.7
Cheese, yogurt, milk powder
Extensive use of cooperatives, focus on high-quality cheese production
France
25.0
Cheese, butter, cream
Renowned for artisanal and AOC (Appellation d’Origine Contrôlée) products
United Kingdom
14.8
Milk, cheese, cream
Strong emphasis on animal welfare and sustainability
Grass-based farming systems with a focus on export
The European Union, a diverse conglomerate of nations, showcases a remarkable variety of dairy farming practices molded by regional climates, traditions, and regulatory frameworks. Germany, France, and the Netherlands are leading producers, significantly contributing to the EU’s dairy output.
Germany’s dairy farming reflects a blend of advanced technology and traditional practices. Large-scale farms utilize state-of-the-art milking systems and automated feeding technologies. Yet, small family-owned farms remain prevalent, especially in Bavaria.
Dairy farming is synonymous with artisanal quality and rich culinary traditions in France. The countryside features farms producing diverse cheeses with PDO status, ensuring regional authenticity. This focus on quality over quantity exemplifies a commitment to preserving France’s agricultural heritage.
The Netherlands is known for efficiency and sustainability in dairy farming. With intensive farming techniques, the Dutch approach employs nutrient recycling and precision farming to reduce emissions. Cooperative models empower farmers with better market access and resource sharing.
Regulations and policies, including the Common Agricultural Policy (CAP), govern production standards, environmental protections, and market operations across the EU. Rules on animal welfare and environmental impact foster greener, more humane farming methods.
The EU’s dairy farming practices reflect a balance between innovation and tradition, driven by local customs and comprehensive policies. This intricate tapestry fuels the continent’s dairy industry. It positions it as a global benchmark for sustainable and ethically conscious agriculture.
New Zealand: A Paragon of Sustainable and Efficient Dairy Farming Practices
Aspect
Details
Annual Milk Production
Approximately 21 billion liters
Leading Dairy Companies
Fonterra, Tatua, Dairyworks
Number of Dairy Cows
About 4.9 million
Primary Export Markets
China, United States, Japan, Malaysia
Key Products
Milk, Cheese, Butter, Milk Powder
Environmental Sustainability
Focus on reducing carbon footprint, water conservation, and biodiversity
New Zealand’s dairy farming is a testament to sustainable and efficient practices. The nation’s pasture-based system, a unique aspect of its dairy farming, prioritizes grass-fed cows freely roaming verdant fields. This enhances cow welfare and results in high-quality milk rich in omega-3 fatty acids and essential nutrients, which is much appreciated globally.
New Zealand’s dairy industry is a cornerstone of its economy, and dairy products make up a significant part of export earnings. By exporting 95% of its dairy produce, New Zealand has established a strong global presence. Its dairy products, like milk powder, butter, and cheese, are known for premium quality and taste.
Through unique farming practices and a strategic export focus, New Zealand sets a global benchmark in dairy. Its commitment to sustainability and innovative farming keeps it at the forefront, consistently and excellently meeting the global demand for high-caliber dairy products.
Brazil: The Rise of a Dairy Powerhouse Through Innovation and Cooperation
Aspect
Description
Production Volume
Brazil is the fourth largest milk producer in the world, producing approximately 35 billion liters of milk annually.
Main Dairy Regions
The states of Minas Gerais, Rio Grande do Sul, and Paraná are the primary dairy-producing regions, collectively accounting for over 60% of the country’s milk production.
Popular Dairy Products
Milk, cheese, yogurt, and butter are among the most consumed dairy products in Brazil.
Technological Advancements
Brazilian dairy farms are increasingly adopting advanced milking technologies, automated feeding systems, and sustainable farming practices.
Economic Impact
The dairy sector contributes significantly to Brazil’s GDP and provides employment to millions, particularly in rural areas.
Brazil’s dairy sector has seen remarkable growth recently, driven by modern farming techniques and the pivotal role of cooperatives. The surge in production stems from advancements in animal genetics, better pasture management, and cutting-edge milking technologies. This progress has increased milk yield and elevated the quality of dairy products, making Brazil a rising star in the global dairy market.
Cooperatives have been critical to this transformation, offering small and medium-sized dairy farmers access to financing, technical assistance, and market intelligence. By pooling resources and leveraging collective bargaining power, cooperatives enable farmers to invest in modern equipment and adopt best practices, confidently navigating the dairy industry’s complexities.
Yet, challenges persist. Volatile milk prices, driven by domestic and international market fluctuations, pose a significant risk. Logistical issues, such as inadequate transportation and storage infrastructure, impact milk freshness and quality. Environmental concerns, notably deforestation and water use, demand more sustainable practices.
Nonetheless, opportunities abound. Investment in technology and infrastructure can alleviate logistical issues, while more vital cooperatives can provide even more support. Rising demand for dairy domestically and in the export markets offers promising growth avenues. Brazil’s dairy sector is poised for continued success with a focus on sustainability and innovation.
China’s Dairy Revolution: From Smallholder Farms to Industrial Giants
Aspect
Details
Major Dairy Regions
Heilongjiang, Inner Mongolia, and Hebei
Primary Dairy Products
Liquid Milk, Powdered Milk, Yogurt, Cheese, and Condensed Milk
Industry Structure
Mix of smallholder farms and large industrial operations
Key Companies
Yili Group, Mengniu Dairy, Bright Dairy & Food Co.
Annual Production
Approximately 31 billion liters (2021)
Challenges
Food safety concerns, fluctuating domestic demand, and regulatory compliance
Government Support
Subsidies, modernization programs, and quality control regulations
Future Trends
Increasing demand for premium products, expansion of organic dairy, and technological advancements
China’s dairy industry has undergone a dramatic transformation, driven by rising domestic demand as the middle class expands. This shift has moved the sector from small-scale family farms to large industrial operations. Government intervention, as implementing strategic policies and providing substantial investments, has been crucial.
Initially dominated by smallholder farmers with just a few cows, China’s fragmented dairy landscape couldn’t meet the soaring demand. To address this, the government overhauled the industry, encouraging the creation of large, technologically advanced dairy farms capable of producing vast quantities of high-quality milk.
Large dairy complexes now house thousands of cows, equipped with state-of-the-art milking parlors, automated feeding systems, and rigorous biosecurity measures. These facilities enhance efficiency and quality control. The government supports this with financial incentives like subsidies and low-interest loans to promote the consolidation of small farms.
Strict regulations ensure animal health and product safety, addressing past issues like milk adulteration scandals. These measures include regular inspections and adherence to international health standards, aiming to boost self-sufficiency and reduce reliance on imports.
However, this megafarm model faces challenges such as environmental sustainability, waste management, and ethical livestock treatment. Despite these issues, China’s proactive modernization of its dairy sector underscores its commitment to meeting dietary needs and becoming a significant global dairy player.
Australia: Balancing Innovation and Sustainability in Dairy Farming
Aspect
Details
Annual Milk Production
Approximately 9 billion liters
Main Dairy Regions
Victoria, New South Wales, Tasmania, South Australia
Number of Dairy Farms
About 5,600 farms
Major Dairy Products
Milk, cheese, butter, yogurt
Export Market Reach
Over 100 countries, major markets being China, Japan, Southeast Asia
Economic Contribution
Estimated at over 13 billion AUD annually
Australia’s dairy industry is a testament to the nation’s focus on innovation and sustainability. Central to its success is the adoption of advanced technologies like automated milking systems, precision agriculture, and herd management software, which boost productivity and improve animal welfare.
Moreover, Australian dairy farmers lead in sustainable practices such as rotational grazing to enhance soil health and integrated water management systems. Efforts to reduce emissions through improved feed management and renewable energy are pivotal, reflecting a commitment to environmental stewardship.
Exports are crucial to Australia’s economy, with 35% of dairy production sent to key markets like China, Japan, and Southeast Asia. High quality and safety standards have bolstered the international reputation of Australian dairy products, driving demand and supporting the rural economy.
However, climate change poses significant challenges. Erratic weather patterns and droughts strain water resources and pastures, necessitating adaptive strategies. The industry has responded with water-efficient irrigation techniques and climate-resilient forage crops.
In conclusion, Australia’s dairy farming is marked by advanced technology, sustainable practices, and a robust export market. While climate change presents challenges, the industry’s proactive approach to innovation and sustainability offers a positive outlook for the future.
Russia’s Dairy Production Landscape: Interweaving Tradition with Modernity
Aspect
Details
Annual Milk Production
32 million metric tons
Major Dairy Regions
Moscow, Tatarstan, Krasnodar
Common Dairy Breeds
Holstein, Ayrshire, Red-and-White
Predominant Dairy Products
Milk, Cheese, Butter
Leading Dairy Companies
Danone Russia, Wimm-Bill-Dann, EkoNiva
Average Farm Size
200-300 cows
Russia’s dairy industry vividly paints contrasts, merging deep-rooted traditional farming with modern techniques. Traditionally, the sector has relied on small to medium-sized family farms, using local breeds and conventional methods. While these practices preserve cultural heritage, they often need more productivity than industrialized systems.
Recently, Russia has seen significant changes driven by government policies to revitalize the dairy sector. These include subsidies for modern equipment, investment in infrastructure, and incentives for large-scale production. The goal is to enhance output and make Russian dairy products competitive globally.
However, modernization has its challenges. Small-scale farmers need help accessing the resources required to upgrade, widening the gap between them and larger, technologically advanced farms. Russia’s harsh climate also demands resilient breeds and sophisticated climate control systems, requiring significant investment.
Government policies have spurred growth and led to industry consolidation, raising concerns about sustainability and fairness. The focus on large-scale farms risks marginalizing small farmers and traditional practices. Despite these challenges, a shared commitment exists to enhance productivity while preserving Russia’s rich agricultural heritage. The future of Russian dairy farming will depend on balancing modern efficiencies with traditional virtues.
Canada: The Quintessence of Quality and Innovation in Dairy Farming
Aspect
Details
Primary Dairy Regions
Ontario, Quebec, Alberta, and British Columbia
Key Products
Milk, Cheese, Butter, Yogurt, Ice Cream
Number of Dairy Farms
Approximately 10,951 (as of 2021)
Average Herd Size
Around 93 cows per farm
Milk Production (annual)
92.2 million hectoliters (2020)
Export Markets
United States, China, Mexico, Japan
Regulatory Framework
Supply management system control production, pricing, and importation
Sustainability Initiatives
ProAction program focusing on animal care, environment, milk quality
A conversation about global dairy production would be incomplete without mentioning Canada, a country distinguished by stringent quality standards and an exceptional blend of tradition and innovation. Nestled in North America, Canadian dairy farming is a model of regulatory excellence and cooperative strength.
Canada’s dairy industry uses a supply management system based on quotas to maintain stable prices for farmers and consumers. This system supports small and medium-sized family farms, fostering a culture prioritizing sustainability and community.
A typical Canadian dairy farm combines pastoral charm with advanced technology. Farmers leverage automated milking systems, precision agriculture, and data analytics to ensure their dairy cows are productive and well-cared for. Technologies like robotic milking machines and advanced feed management systems support high standards of care.
Dairy farming is mainly provincial in Canada, with Quebec and Ontario producing most of the country’s milk. Quebec, renowned for its artisanal cheese industry, draws from European traditions, creating varieties that garner international acclaim. More extensive dairy operations adhere to high standards and quotas in the expansive prairies of Alberta and Saskatchewan.
Despite the prevalence of large-scale farming in the prairies, Canada’s dairy landscape is diverse. Each province has unique agricultural standards and practices, contributing to a rich tapestry of production methods. This regional variability enhances Canada’s ability to cater to various tastes and preferences, from cheeses to milk and yogurt.
Canadian dairy farmers are committed to environmental stewardship, focusing on reducing greenhouse gas emissions, conserving water, and promoting soil health. Many participate in sustainability programs, encouraging organic methods, renewable energy use, and biodiversity preservation.
Through stringent regulation, technological advancement, and a steadfast commitment to sustainability, Canada’s dairy farmers lead the global industry. Their ability to produce high-quality, ethically sourced products while maintaining economic stability offers valuable lessons for other dairy-producing nations.
The Bottom Line
The global dairy landscape is a rich tapestry of methodologies and traditions. Dairy production varies significantly worldwide, from the advanced operations in the United States to India’s deep-rooted and sustainable practices and the diverse techniques across the European Union. New Zealand’s eco-conscious strategies and Brazil’s innovative, cooperative approach further illustrate this diversity.
Despite these differences, common challenges unite dairy producers globally. Climate impact, sustainable practices, and balancing tradition with modernization are universal concerns. Focusing on quality, nutritional balance, and industry diversification ties these efforts together, highlighting a promising future driven by innovation and sustainability.
Key Takeaways:
The United States stands as a leader in milk production with advanced technological integration, boasting an annual output of 223 billion pounds.
India, leveraging a vast cooperative network like Amul, leads the world in milk production, seamlessly blending tradition with modern farming practices.
The European Union displays a rich mosaic of dairy farming methods influenced by region-specific climates, traditions, and regulatory frameworks.
New Zealand excels in sustainable dairy farming, optimizing both efficiency and environmental stewardship.
Brazil emerges as a rising powerhouse in the dairy sector, driven by innovation and farmer cooperation.
China’s rapid industrialization of dairy farming reflects a shift from smallholder farms to large-scale operations, highlighting modernization efforts.
Australia balances innovation and sustainability, ensuring robust dairy production amidst environmental challenges.
Russia intertwines tradition with modern dairy practices, navigating unique regional challenges while growing its dairy industry.
Canada epitomizes quality and innovation, maintaining rigorous standards and embracing new technologies in dairy farming.
Summary: Dairy Month is celebrated annually to highlight the global impact of dairy farming, which provides essential nutrition and supports economic stability for millions of farmers. The United States leads in milk production with 223 billion pounds annually, with leading states including California, Wisconsin, New York, Idaho, and Texas. Primary breeds include Holstein, Jersey, and Guernsey, and average herd size is around 300 cows per farm. Production systems include pasture-based and confinement systems, with technological integration using advanced milking machines and data analytics. Environmental initiatives focus on reducing carbon footprint, water conservation, and manure management. The global dairy industry is complex and evolving, with various countries contributing significantly to its supply. Family-owned farms are vital to the U.S. dairy sector, adopting new technologies and sustainable practices. India, the world’s largest milk producer, leads global dairy farming through vast output and rich traditions, with cooperatives like Amul empowering rural farmers. The European Union showcases diverse dairy farming practices molded by regional climates, traditions, and regulatory frameworks.
Discover why EU milk production is forecasted to drop 0.3% in 2024. How will declining cow numbers and rising costs impact the dairy industry? Read more to find out.
EU Flag waving against blue Sky
European Union milk production is set to face another challenging year, continuing its downward trend into 2024. Several factors contribute to this decline, with a predicted 0.3% drop in cow milk production. As the number of dairy cows falls below 20 million for the first time, it’s evident that consistent growth in cow productivity won’t fully offset the shrinking cow inventories. Rising production costs and lower farm-gate milk prices further exacerbate the situation, making milk production less profitable for EU farmers. Join us as we delve further; these elements paint a comprehensive picture of the EU’s milk production landscape in 2024.
EU Dairy Herds Dwindling: First-Ever Drop Below 20 Million Cows Marks 2024’s Start
Country
Dairy Cows in Milk (January 2024)
Expected Change in Dairy Farmer Numbers (2024)
Milk Production (Forecast for 2024)
Germany
4.0 million
Decrease
Stable
France
3.5 million
Decrease
Slight Decrease
Poland
2.8 million
Decrease
Slight Increase
Belgium
0.6 million
Decrease
Slight Decrease
Netherlands
1.6 million
Minimal Change
Stable
Ireland
1.5 million
Minimal Change
Decrease
At the start of 2024, the EU saw a significant change in its dairy industry: dairy cows dropped below 20 million, hitting 19.7 million. This marks a historic low and indicates a continuing downward trend in cow numbers, which is expected to persist throughout the year.
The Double-Edged Sword of Rising Cow Productivity Amid Shrinking Herds
Even though each cow produces more milk, more is needed to make up for the overall decline in cow numbers across the EU. Simply put, fewer cows mean less milk overall. This imbalance contributes directly to the forecasted 0.3% drop in milk production for 2024. Despite individual productivity gains, the milk output is declining due to the shrinking herds.
A Temporary Respite: Early 2024 Sees Milk Deliveries Surge Before Expected Decline
Early 2024 saw a 1.7% rise in cow’s milk deliveries compared to the same period in 2023. However, this boost is short-lived. Many farmers are expected to sell their cows or exit milk production later in the year, leading to a decline in deliveries.
The Multifaceted Challenges Shaping Europe’s Dairy Economy
The economic landscape for dairy farmers is becoming more challenging. A key issue is the steady drop in farm-gate milk prices since early 2023, significantly affecting profitability.
Production Costs: High production costs for energy, fertilizers, and labor persist, squeezing farmers’ margins despite some recent reductions.
Geographical Impact: In Germany, France, Poland, and Belgium, smaller and less efficient farms are hardest hit. The pressure from lower milk prices and high input costs drives many to reduce herd sizes or stop milk production.
Environmental Regulations: Environmental rules in the Netherlands and Ireland seek to cut nitrogen emissions, which are expected to negatively affect herd numbers and production costs in the long term.
Overall, larger farms may better cope, but the trend toward consolidation continues due to falling profits and rising costs.
Environmental Regulations Cast Long Shadows Over EU Dairy Farming
Environmental regulations are threatening Europe’s dairy farming. New measures to curb nitrogen emissions are adding pressure on struggling farmers in the Netherlands and Ireland.
For example, the Netherlands aims to cut nitrogen emissions by 50% by 2030, including reducing the number of dairy cows and relocating farms. Ireland’s targets similarly demand stricter manure management and sustainable farming practices, both costly and complex.
These regulations, combined with high production costs and declining milk prices, make it challenging for smaller farms to stay in business. Many are choosing to exit the market rather than invest in expensive upgrades.
As a result, smaller farms are shutting down, and larger farms need help to maintain their herd sizes. Although these regulations are essential for a greener future, they add another layer of complexity to the EU dairy industry’s challenges.
Generation Renewal Crisis Accelerates Market Consolidation in EU Dairy Sector
A growing trend in market consolidation and farm closures is evident within the EU dairy sector. One key issue here is the challenge of generation renewal. Younger generations are increasingly hesitant to continue milk production due to the heavy workload and tight profit margins. Elevated production costs and decreasing farm-gate milk prices also make it challenging for smaller, less efficient farms to stay in business.
However, larger and more professional farms show notable resilience. They often have better infrastructure, access to advanced technology, and excellent financial stability, allowing them to maintain herd numbers despite broader declines. By leveraging economies of scale and more efficient practices, these farms can better absorb economic shocks and comply with environmental regulations.
This disparity between small and large farms is accelerating market consolidation. As smaller farms exit, larger ones are absorbing their market share. While the total number of dairy farms is decreasing, those that remain are becoming more advanced and better equipped to tackle future challenges in the dairy economy.
Record-High Milk Prices in 2022 Spark Production Surge, Only to Shatter in 2023-2024
The surge in milk deliveries in 2022 and 2023 stemmed from record-high EU farm gate milk prices in 2022, peaking in December. These prices incentivized farmers to boost production despite rising costs, supporting the dairy industry at that time.
However, these prices began to fall from May 2023 through March 2024, squeezing farmers financially. Although still above the 5-year average, the decline sharply contrasted with 2022’s profitability. With global milk production up and dairy demand fluctuating, EU farmers adjusted their production levels, paving the way for a predicted drop in milk deliveries in 2024.
The Ripple Effect: How Global Market Dynamics Shape EU Milk Prices
Global market dynamics significantly impact EU milk prices. The world’s largest dairy exporters, including Australia, the United States, the UK, and New Zealand, have increased production, leading to an oversupply that pressures prices downward. This makes it challenging for EU producers to maintain their margins.
Simultaneously, demand from major importers like China and some Middle Eastern countries is declining. Various factors, including trade tensions and shifting consumer preferences, contribute to this weaker demand.
This supply-demand imbalance has reduced farm gate milk prices in the EU. While European prices remain higher than those of international competitors, more than this advantage is needed to counteract the rising production costs and reduce global demand. The EU dairy industry must navigate these challenges to stay competitive and sustainable.
Price Disparities in Global Dairy: EU’s Costly Position Against New Zealand and US Competitors
When you look at milk prices, you’ll notice that the EU’s are much higher than those of other major exporters like New Zealand and the US. In February 2024, the EU’s milk price hit EUR 46.42 per 100 kilograms. That’s 27% more than New Zealand’s and 18% more than the US.
These higher prices mean EU dairy products cost more to produce and sell, making it challenging for EU producers to compete globally. Higher costs can squeeze farmers further, especially with high input costs and changing demand.
Weather Woes: Uneven Conditions Across Europe Impact Dairy Farming
In 2024, weather was vital in shaping feed and pasture conditions across Europe. Spring brought warm temperatures and balanced rainfall, leading to good green feed availability. However, the northwest, especially Ireland, faced challenges. Ireland’s dairy farming, which relies on cattle grazing for up to nine months, has struggled with wet soils and recent rains. These conditions hindered field access and grassland regrowth, severely impacting milk production.
The Bottom Line
In summary, EU milk deliveries are forecast to dip to 144.8 million metric tons (MMT) in 2024. Unfavorable weather and high input costs for energy and fertilizers are straining farmer margins. Despite brief boosts in productivity, these challenges will likely persist throughout the year.
Key Takeaways:
Decline in Cow Numbers: Cow numbers fell below 20 million for the first time in early 2024, indicating a continuing downward trend.
Productivity vs. Herd Size: Increased productivity per cow is not enough to counterbalance the overall decrease in herd sizes.
Initial Surge in Milk Deliveries: Early 2024 saw a 1.7% increase in milk deliveries, but this is expected to decline as more farmers exit the industry.
Decreasing Profitability: Farm-gate milk prices have been falling since early 2023, alongside high production costs, squeezing farmers’ profit margins.
Impact of Environmental Regulations: Government plans to cut nitrogen emissions in countries like the Netherlands and Ireland are affecting herd numbers.
Market Consolidation: The industry is seeing greater consolidation, with smaller, less efficient farms closing and bigger farms maintaining their herd sizes.
Weather Complications: Varying weather conditions across Europe in 2024 have impacted green feed availability and pasture conditions, particularly in Ireland.
Summary: The European Union’s milk production is experiencing a significant decline, with a predicted 0.3% drop in cow milk production. This decline is attributed to rising production costs and lower farm-gate milk prices. The number of dairy cows has fallen below 20 million for the first time, making milk production less profitable for EU farmers. In early 2024, there was a 1.7% rise in cow milk deliveries compared to the same period in 2023, but this was short-lived as many farmers were expected to sell their cows or exit milk production later in the year. The economic landscape for dairy farmers is becoming more challenging, with a steady drop in farm-gate milk prices since early 2023 significantly affecting profitability. High production costs for energy, fertilizers, and labor persist, squeezing farmers’ margins despite some recent reductions. The EU dairy sector is experiencing a growing trend of market consolidation and farm closures, with younger generations increasingly hesitant to continue milk production due to heavy workloads and tight profit margins.
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