In 2012 less than half of the farmers specialized in the milk production in the European Union were profitable. In addition a small amount  of producers was on the verge of profitability. These are the results of the international comparison of the cost of production of milk, which were presented at the annual congress of the Association "European dairy farmers" held in Falkenberg (Sweden) on June 26-28, 2013.

The situation of the dairy business in the EU is rather complicated. Only 44% of farmers, who are members of an international comparison of production costs, were able to generate profits last year. "Only 27% of milk producers were profitable at the expense of their business, the remaining 17% were profitable owing to subsidies" - Taras Gagalyuk, director of the agency «AgriSurvey» explains.

According to expert’s data in 2012 small EU farmers showed better results than large ones because they had less problems with the provision of resources, including forage that are known to become more expensive due to bad grain harvest last year. "Nevertheless big producers occupied more attractive long-term position among profitable farmers as they remain profitable even when their selling price is lower than that of small farmers. Thus, the average price of milk by small producers was 33.6 cents/kg of milk adjusted to energy and by large farmers - 31.5 cents/kg ", - T. Gagalyuk said.

A long-term competitive advantage of larger specialized dairy producers in the EU was also confirmed by the data of the European Commission, according to which the number of farms engaged in milk production has decreased by 32% compared to 2007. But at the same time the average number of cows on a farm is 28, which is 30% higher than in 2007.

The average profitability of milk production of European farmers in 2012 was minus 10.8%, including subsidies - minus 3.6%. For comparison, the average profitability of milk production in Ukraine in 2012 was 2.3%. The share of government support through budgetary subsidies and VAT in total milk production by farms was 18.7%.

Information. Association "European dairy farmers" is an association of leaders of the EU milk market, created with the purpose to share experience and knowledge of technology, improve production efficiency and the situation on the market of milk and dairy products. The Association has 294 members, including two Ukrainian companies. UCAB is the National Partner of the Association "European dairy farmers" in Ukraine.

Association "Ukrainian Agribusiness Club"  

Velyka Zhytomyrska str., 20 А, office 53, Kyiv, 01001 

Phone: +380 44 201-4950 

Fax: +380 44 201-4951 

099 272 59 30

[email protected]  

Tetiana Kotyk 

www.agribusiness.kiev.ua

The Association "Ukrainian Agribusiness Club" (UCAB) www.agribusiness.kiev.ua was founded in 2007 to protect the economic and professional interests of players of agribusiness in Ukraine. UCAB is a unique platform in Ukraine for establishing business contacts between the leaders of agribusiness, improvement their work and dialogue with the government. UCAB actively supports Ukrainian producers in establishing and maintaining international business relations. The Association consists of the largest producers and processors of agricultural products in Ukraine.