Dairy processors on the continent - especially in France and Germany - are wary of passing lower market returns back to their suppliers through milk price cuts amid fears that doing so could trigger an exodus of farmers from the dairy sector, the Irish Farmers Journal’s Dairy Day heard on Saturday.
International trade consultant with GIRA Christophe Lafougere suggested that these processors appear to be more focused on ensuring continued milk supplies than they are on immediately passing back market declines to maintain margins.
“At the moment, a lot of dairy co-ops on the continent are looking twice before touching their price, because what we're seeing on the continent is that the average age of the dairy farmers, depending on countries, is pretty high,” he stated.
“Some of these dairy co-ops, especially the French ones but also in Germany, are expecting a lot of farmers to quit the business if milk price goes down too far.
“The problem is, if this guy leaves the business, he will not come back. At the moment, they are trying to avoid to have a second wave of departure.”
French farmer’s view
Dutchman Hermjan Darwinkle, currently milking cows in France, told attendees that French dairy farmers have not witnessed much of an impact of the global dairy market slump to date.
“I think France is always later than the others,” he explained on milk price cuts.
“When your price is going down, it stays still or it goes a little bit up in France and then it goes down later on. But we don't go as deep and we don't go that hard,” the farmer said on milk price swings.
Lafougere maintains that the impact of succession issues on the continent was put on pause as older farmers pushed out their retirement date during the past two years’ milk price strength.
“The problem is, over the last two years we've seen, I don't know if it's a lot, but we've seen quite a lot of farmers stay into business instead of retiring because the margin was good,” the trade expert said.
“But the problem is now we are back on a more normal cycle for dairy farmers. So, there is some expectation that we will see a second wave of departure in the next year.”
Dairy Day: ‘no meat on the bones’ yet in Aurivo and Dale Farm talks
'A lot of pain' before mid-2026 milk price rebound - Kerry Dairy Ireland
Dairy Day: water quality poses planning challenges in southeast
Dairy Day: €400 to €500/cow needed in cash reserves going into 2026
Dairy Day: sense that use of dairy alternatives has peaked – NDC CEO