Re: Brexit and Britain irrelevant?
Originally Posted by
OldFogey
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Ironically, that was the left's (including Corbyn's) reason for opposing this aspect of the EU - it's a capitalist market, where production is for profit and not for need.
(It's what Karl Marx called a "crisis of overproduction").
To complete the dream of trade on wto terms.
The average price that farmers receive for a kilo of milk (farmers count with kilos) is now around 30 cents in Europe. That is almost a quarter less than the price they received in 2014 for a kilo of milk.
And the decline continues. For example, farmers who are affiliated with FrieslandCampina, the largest cooperative in Europe that pays above average, will only receive 28.5 cents next month. Far below the cost price, which in the Netherlands is around 42 cents per kilo. European subsidies included.
One reason for the fall in the milk price is the abolition of the milk quota, which took effect on 1 April 2014, which for more than thirty years in Europe reduced supply, and therefore a stable and artificially high milk price. Yet the farmers wanted to get rid of it: they saw demand, especially outside of Europe, increase and thought they could benefit from it.
This has not been achieved so far. European farmers have started to keep more cows and produce more milk - just like the United States and New Zealand. Demand from emerging economies, however, declined. Chinese imports from the Netherlands almost halved in the first four months of this year. Economic growth in China is disappointing and the country itself is also trying to meet the increasing demand for dairy.
In addition, the Russian trade boycott, which has banned all imports of European dairy since last July. A big blow: in 2013 European exports of dairy products to Russia were still 2.3 billion euros. Before the boycott, 2.5 percent of Dutch dairy went to Russia.
More supply and less demand. And the balance sheet is not expected to recover this year. Also because stocks of milk powder are starting to accumulate. Rabobank, with at least EUR 12 billion a major lender for Dutch dairy farmers, believes that the milk price will fall even further this fall. The bank advises farmers not to fall short of liquidity problems, but to request a delay in repayment.
Farmers were already warned. By releasing the milk quota, the price would float more on the world market and become more volatile. One war or drought, no matter how far, can already have an effect on the milk price. To cope with the fluctuations, farmers have to work with more reserves.
"There is no tap on a cow," says Kees Romijn of the agricultural and horticultural organization LTO. "You can't suddenly produce less." So, in a difficult year, there is nothing left to do but postpone investments and capitalize on capital. "But the liquidity of dairy farmers is starting to dry up. They will run into problems in the coming six months. "