German farmers received an average of 47 cents/kg in the first half of this year, 10 cents more than the ten-year average. Many dairy processors currently even pay more than 50 cents, especially in southern Germany.
Currently, more than 48,000 dairy farmers in Germany supply the industry with about 31 million tons of raw milk annually. Processors expect a further production decline of 5 to 7 percent in the coming years. A shortage of raw materials is causing major problems for many processors and sometimes leads to operational stoppages.
According to the dairy factories, ‘green issues’ are one reason why dairy farmers are hesitant to invest in expanding their capacity. In the new animal welfare law, Germany will implement a ban on tethering dairy cattle. The industry advocates for a generous transition period.
The dairy industry is also under pressure due to the record prices currently paid for butter: butter is more expensive than ever. Nevertheless, 3.2 percent less butter was produced last year (and less imported as well). The sector struggles to fulfill supply contracts. Sending reminder letters is pointless when there are shortages of raw materials, an official noted.
Moreover, another development is changing the shortage of milk fat: “The light wave is over,” says the dairy umbrella organization. Consumers have returned to choosing dairy products with a natural fat content. But this means that for many recipes the demand for milk fat increases and less remains for butter factories.