Spilled Milk

A continuing delivery strike by some 30,000 German dairy farmers in protest at EU moves to raise production quotas and push down prices has spread from southern Germany to the north, and also affected milk deliveries in the Zurich area of Switzerland, and Holland.

Deliveries dropped by some 60 percent in the Netherlands and in Switzerland's Zurich region as farmers showed solidarity with German dairymen, the European Milk Board, based in Hamm, Germany, said on Wednesday, May 28.

Across Germany, more than 50 percent of usual milk deliveries were not made, German Federal Dairy Farmers Association (BDM) said on Wednesday in Berlin. End-consumers should soon begin to see the effects of the boycott, a BDM executive said.

Calls for higher milk prices

The strike began on Tuesday as farmers heeded a call by the BDM to stop supplying milk, in a bid to force up prices hovering between 0.28 and 0.34 euro ($0.43 and $.53) per liter.

"We plan to decrease the flow to the food industry further still in coming days and then supermarkets will start feeling the pinch," said Hans Foldenauer, a spokesman for the BDM.

BDM deputy president Stefan Mann said federation had received "several declarations of support" from Austria, Belgium, Luxembourg, Switzerland, the Netherlands and "parts of France."

"I expect more countries to join the strike," he told the Frankfurter Rundschau daily.

Germany is Europe's biggest milk producer. The BDM is demanding the milk price be pushed up to 43 cents per liter, saying that it is uneconomic to sell below 40 cents per liter. BDM members produce some 45 percent of Germany's milk.

Austria joins boycott

Austria's IG Milch dairy association on Wednesday called on its 6,000 members to cut back deliveries by half in protest at the milk price.

IG Milch head Ewald Gruenzweil warned consumers, especially hospitals, kindergarten and schools, to start stocking dairy products.

"We're predicting (supermarket) shelves to empty rather quickly as people start hoarding, following this determined action in Germany and other European countries," he said.

The aim of the Austrian move was to prevent milk being exported to Germany, Austrian daily Der Standard reported.

About 45 percent of Austrian milk producers currently export their products. The excess milk will now be used as feed, be processed or added to manure dumps.

The Dutch Dairymen Board (DDB) has urged its 4,000 producers to "keep the milk on the farm." Switzerland's Big-M union said 200 producers in the Zurich region had delivered virtually no milk on Wednesday.

Food industry remains unruffled

Despite these warnings, food-industry representatives deny consumers will see any effects.

“There will be no limitations on consumers, just because farmers are refusing to deliver milk,” said the head of the Association of German Food Industries, Juergen Abraham, in Berlin.“The Danes and the Dutch are ready to fill the void. They'll be happy to do it,” he said.

The milk producers are demanding new, yearly tariff negotiations with the dairy factories that will set base milk prices. Until such a system is in place, no milk will be delivered, BDM chief Romuald Schaber said.

Germany's agriculture minister, Horst Seehofer, took the side of the farmers, saying an efficient farming sector is important for the country. He reiterated his criticism of the EU decision to once more raise milk production quotas.

"Dairy farmers need a price they can live on," Seehofer said. "The objective has my political support."

But he rejected the suggestion by opposition party Free Democrats to give concrete tax breaks to the dairy farmers. “That immediately sets off other industries to saying, ‘We have problems too, and who is helping us?'”

Dairy group to file lawsuit

Germany opposed a decision by European Union agriculture ministers in March this year to allow a bloc-wide increase in production of two percent as part of a larger plan to phase out dairy subsidies by 2015.

Seehofer at the time warned there was a risk the move could lead to "new milk lakes and butter mountains," a reference to surplus production in Europe triggered in 1984.

The BDM said it will file a lawsuit at the European Court of Justice to stop to the quota hike.

Brussels has said it must respond to growing global demand for milk, especially from booming Asian nations. Germany's dairy farms are controlled by a few powerful companies which currently pay 27 cents a liter in northern Germany and 35 cents a liter in southern Germany for milk, according to BDM data.