According to the quarterly update of the cost study established by the Farm Economics and Rural Studies Office (BAL), milk production costs in Germany amount to 49.73 cents per kg (as of July 2023). With 46.87 cents per kg, costs were at a lower level in April 2023.
The average farm-gate milk price fell significantly and was only 40.63 cents per kg in July 2023. In January, the price still amounted to 56.93 cents and in April to 45.11 cents. For July, the price/cost ratio shows a shortfall of 18 percent, which is a 37-point drop compared to January, when cost coverage was still 119 percent.
The European Milk Board is calling for the activation of a voluntary volume reduction scheme at EU level in order to achieve stable prices on the dairy market with the help of minor temporary reductions in milk volume.
Development of milk production costs in Germany
Here you have the evolution of German milk production costs from 2014 to July 2023.
The price/cost ratio illustrates to which extent milk prices cover the cost of production. In July 2023, milk prices did not cover the cost of production. The shortfall was 18%.
Here you see the evolution of the price/cost ratio since 2014.