German milk strike spreads through Europe

Posted by Daniel Palmer on 29th May 2008

A strike by German dairy farmers began on Tuesday with farmers refusing to supply milk to factories in response to falling farm gate prices, the German Federal Association of Dairy Cattle Farmers (BDM) said in a statement.

The boycott, orchestrated by the 30,000 strong BDM, is in response to anger about farm gate prices falling by about 15 per cent this year.

BDM data indicates that north German dairy farmers currently receive approximately 27 Euro cents per litre of milk supplied with their southern counterparts getting about 35 cents per litre. This represents a major discrepancy when compared to last year’s prices of 40 cents per litre and is made more difficult for farmers to deal with given production costs have reportedly surged by 7 cents a litre. In 2001, the price on average was 33.6 cents indicating that over the past seven years the farm gate returns have remained relatively stagnant.

The BDM claim that 40 cents is the bare minimum for farmers to be able to survive and are believed to be holding out for upwards of 43 cents.

Romuald Schaber, head of the BDM, believes farmers need to use their bargaining power in order to be heard. “All we can do is use our milk as a weapon,” he declared, according to the DPA News Agency. “Milk is might, and we have the milk.”

The European Milk Board has shown their support for the BDM by issuing a plea for farmers to stop supplying milk to factories from today onwards. Their request has led to some farmers in the Netherlands, Switzerland, Austria and Romania joining the protest.

Ewald Gruenzweil, President of the EMB, warned consumers to start preparing for a shortage. “We’re predicting (supermarket) shelves to empty rather quickly as people start hoarding, following this determined action in Germany and other European countries,” Gruenzweil said, according to AFP.

The boycott is anticipated to last between seven and ten days and is likely to cost farmers approximately 2% in lost yearly income (which is worth about .6 cents/litre, according to the EMB). As the 2% can be made up with a .6/cents per litre price increase, farmers consider the boycott as a low risk strategy, which, if successful in raising farm gate prices, will more than make up for the short-term income losses.