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European dairy sector: Coping during Covid-19


BY PHILIPPE CALDIER I


n the first presentation, Gérard You and Christophe Perrot of Idele spoke of the ranking of EU-28 countries on inter- national markets and the competitiveness of the main industries in Northern Europe.


“The European Union is the world’s leading exporter of dairy products,” said Gérard You. World trade of dairy products dou- bled in value in ten years and was estimated at € 48 billion in 2019. The EU represented 37% of this trade value, followed by New Zealand and the United States. “A major exporter of cheese and powder (lean powder, whey, and infant milk), the EU-28 was in 2019 the second biggest contributor to the growth of international trade in dairy products in volume be- hind New Zealand,” You stated. He added that the six countries that have contributed to the growth in EU exports to third countries since 2013 are the Netherlands, France, Germany, Ireland, Denmark and Italy. The speaker then turned his attention to French dairy farmers and their incomes. For several years, France has seen its trade surplus (balance of foreign trade in dairy products) decrease with the EU and the country has not taken advantage of the abolition of quotas to increase its volumes. Agricultural income per self-employed French farmer (at € 20,908/year over the period 2013–2017) is now right in the middle between Germany (€ 32,786) and Poland (€ 8,602) and well below the annual income of those in Ireland (€ 51,245 from 2013 to 2017), Denmark (€ 49,191) and the Netherlands (€ 40,306).”French farmers have neither the high milk prices of the Dutch and the Danes nor the low production costs of the Irish,” he summed up. Christophe Perrot from Idele also spoke, commenting on four countries. He explained that in Denmark, the model has be- come very unequal. The second dairy crisis of 2015–2016 led to many bankruptcies, and takeovers were organised by banks to the benefit of elite agricultural entrepreneurs, including Dutch ones. “The Danes no longer want to produce milk in Denmark or are looking elsewhere for extra-European capital to carry these farms,” commented Perrot. In the Danish dairy sector there has been an increase in organic (10 to12% of col- lection) and there is confidence in the Arla cooperative which is very active on topical subjects such as sustainability and the climate. In the Netherlands, there have been very intense


French Livestock Institute Idele held a webinar on 3 June 2020 which highlighted the preservation tactics used by the dairy sector in European countries to deal with Covid-19. What were the impacts and how has the sector coped? We take a look at what the speakers had to say.


debates in the last two years about which direction to take. The country has seen sharp reduction in livestock, control of production and upgrades and high milk prices which are necessary to support farms that are often very specialised. In Germany there is great disparity in the size of farms: 40 cows on average can be seen in the south, 100 average in the north and 200 in the east. “After massive support for in- vestment from the north, a gradual transformation of Bavarian livestock farming is underway,” he said. Finally, Ireland has seen strong growth in volumes (from 5 billion to 7.5 billion li- tres). “After playing the volume card, the Northern European dairy sectors are preparing to move to upgrading (more added value on the final product),” concluded Perrot.


Covid-19 As a result of the Covid-19 pandemic, European exports of dairy products were reduced in the first quarter, particularly cheeses and lean powders (see Figure 1). Pandemic contain- ment measures led to significant changes in consumption – moving from eating out to eating in at home, which particularly affected dairy products. After an initial drop in prices was observed for butter and lean powder, a rebound has occurred since mid-April with better performing cheese prices. What were the strategies of European dairy processors against Covid-19? For Benoît Rouyer of CNIEL (National Interprofes- sional Centre for the Dairy Economy), while the Covid-19 pan- demic caused an exceptional economic shock with an impact which is not yet fully percieved, there is relative preservation of the dairy sector compared to the collapse of whole sectors of the economy. “The current strategy of dairy operators is de- fined in terms of two major challenges,” stated Rouyer: an op- erational challenge (ensuring the continuity of milk collection, processing and distribution of dairy products) and a


▶DAIRY GLOBAL | Volume 7, No. 3, 2020 37


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