The packed room in Brussels showed that the European Dairy Association’s Dairy Policy Conference, ‘EU Dairy Dynamics beyond 2015’ was a timely subject. The industry continues to come to grips on what the dairy landscape will look like after the EU quota system ends in 2015.

However, the conference, despite its best intentions, threw up more questions than answers. Still, overall the outlook is positive. TorstenHemme of the IFCN notes that the world will need an average of 20 million more tonnes per year, and the EU is well-placed to help supply that. His later contention that a 60-cow dairy business is on the way to going out of business did raise some hackles, but he did express optimism that Europe was a ‘growth engine’ for global dairy production.

The Swiss have already gone quota-free, having phased out the system by 2009. What has been installed appears to be a banded system of milk prices and sales, held in place by a ‘gentlemen’s agreement’ up and down the supply chain in the country. As later speakers noted, the Swiss appear to have replaced one complex set of rules for another. That being said, Dr Markus Willimann of Emmi defended his country¹s actions, noting that dairy production has stabilised in Switzerland after an initial surge, and milk prices are higher than the average EU price. The advantage is that the higher prices safeguard domestic milk production, and a disadvantage is that the Swiss export price is still reliant on higher world prices being maintained. The difference between the Swiss system and EU quotas, Willimann said in response to questioning, is that the quantity of milk produced is no longer fixed. He also explained how the new system means that retailers are more involved, and can see how lower prices affect the margins up the supply chain.

See the May issue of Dairy Industries International for the full report.