Big German prices bring overproduction

Deliveries to dairies from milk herds in Germany are in danger of bursting through EU quota restrictions this year, warn the country’s Central Market and Price reporting agency (ZMP).

Encouraged by much higher producer prices towards the end of 2007 farmers look like increasing deliveries by an estimated 1.2% over the previous quota year (the 12 months from April through to the next March). A 0.5% increase has been awarded by the EU for the present quota year to a total 28 million tonnes but Germany is expected to produce more than 1% extra with expected additional deliveries of around 300,000 t which in turn will lead to penalties levied on all dairymen exceeding their individual farm quotas.