The German dairy industry is unhappy about the lagging milk production. Although there are record prices, this does not yet lead to increased production. The association of German dairy processors says that the milk supply is still 2.1 percent lower than last year.
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 are currently paying more than 50 cents, especially in southern Germany.
Currently, over 48,000 dairy farmers in Germany supply the industry with approximately 31 million tons of raw milk per year. Processors expect a further decline in production of 5 to 7 percent in the coming years. A shortage of raw materials causes major problems for many processors and sometimes leads to operational standstills.
According to the dairies, 'green issues' are one of the reasons why dairy farmers are reluctant to invest in expanding their capacity. In the new animal welfare law, Germany will ban the tethering of dairy cattle. The industry is calling for a long transition period.
The dairy industry is also under pressure from the record prices currently being paid for butter: butter is more expensive than ever. However, butter production fell by 3.2 percent last year (and imports fell as well). The sector is struggling to meet supply contracts. Sending reminders is pointless when there are shortages of raw materials, one official noted.
In addition, another development is changing the shortage of milk fat: “The light wave is over,” says the dairy association. Consumers are again opting for dairy products with a natural fat content. But this means that for many recipes the need for milk fat is increasing and there is less left for the butter factories.