But why is this this happening? The milk situation in Europe is a case study in economics; the first lesson being supply and demand. While in the U.S. milk is so expensive, people take out business loans to get them, milk is practically free in Europe.
The oversupply of milk has been triggered by a number of factors. Firstly, China, which is the world’s largest importer of milk — due to limited production coupled with a huge population — has largely reduced its demand for milk.
Unfortunately, even after partly losing its biggest market, things are seemingly getting worse for Europe’s milk situation as demand has also decreased in North Africa, the Middle East and Russia. Russia’s case is a particularly critical blow, considering it previously imported more than 25% of the European Union’s butter exports, and close to 33% of cheese exports. This new move has been driven by the country’s new food imports embargo, which seeks to make Russia completely self-sufficient.
The result? Well, milk prices have fallen 5% across Europe’s retail outlets, including supermarkets. In France and the United Kingdom for instance, a liter of milk would cost you the equivalent of about $1 on supermarket shelves. A liter of mineral water on the other hand, costs about the same in France, and roughly $1.5 in the UK.
With supermarkets acquiring their milk at about 37 cents per liter from wholesalers, the biggest victims of this crisis are farmers. As a result, they have become exceedingly vocal about their disappointment with the current trend, which forces them to sell their milk products at a loss.
All through summer, Belgian and French farmers took their frustration to the streets, throwing milk and fruits as they sought quick resolution of the crisis from their respective governments. The United Kingdom also saw its fair share of the protests, with farmers clearing milk from store shelves and blocking entrances to stop shoppers from accessing supermarkets. One of the most outstanding protests occurred in Stanford, where more than 70 protesters stormed into a supermarket with two cows.
Due to the growing frustration, farmers further raised their protests a notch higher and made their way to the EU headquarters in Brussels, Belgium on the 7th of September 2015. After demonstrating for a couple of hours, they engaged the riot police with a combination of fireworks, hay and eggs. Meanwhile, on the same day, the British Farmers Union met for an emergency summit, where they resolved to continue pressuring supermarkets to increase prices that will mitigate production costs.
Their sentiments are being echoed by the European Milk Board, which is also pushing for restoration of production quotas.
Fortunately for farmers, their efforts have paid off. As a measure of providing relief to their dwindling income, the European Union has pledged to provide more about $555 million. CNN Money further reported that France also made plans to support its farmers though for a 600 million Euro package.
As farmers wait for the said plans to roll out, consumers will continue enjoying milk and dairy products at significantly lower prices than they were previously used to.