1 000 tonnnes
PHOTO: IDELE
PHOTO: IDELE
PHOTO: IRISH FARMERS’ ASSOCIATION
MARKET ▶▶▶
Figure 1 - European exports of dairy products were reduced in the Cumulative EU exports since January*
100 150 200 250 300 350
50 0
Butter & butter oil
Cheese
Skimmed milk powder
Source: GEB – Institut de l’Élevage d’aprés GTA
responsibility challenge (guaranteeing the safety of employ- ees and showing solidarity with caregivers and the communi- ty in general). Covid-19 arrived at the peak of milk collection, yet very few European companies called on farmers to reduce their production. “The strategy of European dairy companies has been oriented on the operational side, with a brake on in- vestments,” he said. “We were able to get through this crisis by mobilising teams and moderating the April collection (2 million litres less),” said Bertrand Rouault from Eurial, the milk branch of the Agrial group, a cooperative in the west of France whose milk repre- sents 40% of the total national production. Brands (53 brands covering 850 products), international sales (37% of turnover) and innovation are the three major levers of this French dairy cooperative of 4,300 milk producers, with a collection of 2.4 billion litres of milk per year (including 6% goat milk and 3% organic cow’s milk). While Rouault is pleased to have been able to collect all the milk produced during the lockdown period, the drop in exports and the ma- jor change in eating out were not all offset by the increases in retail sales. The halt in eating out resulted in Eurial losing 75% of
Whole milk powder
Whey powder
March 2017
March 2018 March 2020
turnover in this sector from 15 March to 11 May, resulting in a weakened clientele and the probable disappearance of many players. “What worked was the sales of basic products such as butter, cream or Soignon goat’s cheese,” he said, adding that managing the way out of the crisis is complex.
Three Irish scenarios Catherine Lascurettes, head of the dairy sector of the Irish Farmers’ Association, gave an interesting presentation on the impact of Covid-19 on Irish farmers. “Despite concerns about the impact on farms, rural areas have been affected relatively little by Covid-19,” she said that protocols have ensured conti- nuity of collection (which even increased by 3.6% over the first four months of the year). “From February on, our industry was very reactive and collab- oration between all the processors ensured the safety of the employees and the sustainability of the transformation,” re- called Lascurettes. The impact of this situation on producers was a drop of 3 c/l from March to April, cancelling the gains at the end of 2019. “Our battle for the coming months is to put an end to this price reduction,” she said. According to the Teagasc research centre, Irish dairy income would have increased by 9% in 2020 compared to 2019 with- out a Covid-19 pandemic. Three scenarios are envisaged by Teagasc to measure the impact of Covid-19 on Irish agricul- ture: an optimistic scenario with an increase in milk produc- tion of 2%, a milk price drop of 10% and a fall in income of 21% compared to 2019; a median scenario with an increase in production of 1%, a drop of 15% in the price of milk, and a 36% fall in income, and a pessimistic scenario with a decrease in production of 3%, a 20% drop in milk prices and a 49% fall in income (€ 39,505 compared to € 49,346 for the median sce- nario and € 60,985 for the optimistic scenario). “A global re- cession impacting the purchasing power of consumers is very likely,” said Lascurettes, who added that other concerns could impact the Irish dairy sector: the impact of Brexit (the United Kingdom represents more than 30% of Ireland’s dairy exports – cheese and butter in particular), the new direction of Euro- pean agricultural policy, as well as actual government formation talks with the Green Party.
Gérard You of Idele. 38 ▶DAIRY GLOBAL | Volume 7, No. 3, 2020
Christophe Perrot of Idele.
Catherine Lascurettes, IFA.
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