Dairy farmers adapt to EU’s changing conditions

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With its narrow streets and houses chiselled into the rocks, the ancient charm of Monschau in the Eifel region of western Germany serves as an inspiration to farmers fighting to survive Europe’s deepening dairy crisis.

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Hey there, time traveller!
This article was published 13/08/2016 (2305 days ago), so information in it may no longer be current.

With its narrow streets and houses chiselled into the rocks, the ancient charm of Monschau in the Eifel region of western Germany serves as an inspiration to farmers fighting to survive Europe’s deepening dairy crisis.

Like the town that has reinvented itself through the centuries, some are mixing the old with new.

Dairy farmer Markus Legge, 53, converted his 80-hectare dairy operation to organic production in 2004. A key cost- and labour-saving technology for his operation is two portable robotic milkers positioned in the paddocks.

LAURA RANCE / WINNIPEG FREE PRESS Dairy farmer Markus Legge is coping with the European “dairy crisis” by lowering costs and increasing his margins through organic milk production.

The cows amble one by one out of one paddock up to the milking parlour and enter the stall. A robotic arm attaches the milker as the chute opens and offers them grain to eat. When they’re done, the gate opens and off they go into a new pasture.

Situating the robotic milkers where his 125 cow herd is grazing, as opposed to in a central barn, means Legge doesn’t have to move the cows one to two kilometres twice a day. That’s a huge saving in labour for him and less stress for the cows, which means he has to hire less help and he has more time to do other things on the farm.

Europe’s dairy sector has been particularly hard hit since the European Union ended its quota system, the last of its supply-management program, in April 2015. Many farmers had expanded their production in anticipation of new markets in Russia, China and perhaps even Canada under it’s new trade deal with the EU. Those markets have yet to materialize. Instead, the market crashed under the weight of surplus production.

Today, milk is selling in supermarkets for less than the cost of bottled water, well below the cost of production. The EU Common Agricultural Policy recently stepped up with 500 million euros ($720 million) in support for farmers who voluntarily curb milk production. Many would like to see a full return to supply management.

Because he is producing organic milk, Legge has lower production costs and he receives a higher prices for his milk, more than double what conventional dairy farmers receive when premiums for quality and subsidies for sustainable farming practices are considered.

Those more than make up production that is slightly lower because he grazes his cows three seasons a year instead of keeping them confined and eating concentrated feed.

Most of his farmland is only suitable for forage, so it’s tailor made to the organic method. Even the organic market goes through volatile price swings relative to available supply. Organic suppliers are routinely asked to limit their deliveries to their processor until markets recover. Legge is working with two other local farmers on a plan to build their own dairy-processing facility as a means of securing a stable market for their milk.

Just as Monschau, which gained fame thanks to its weaving industry, is now capitalizing on its old-world ambience, another dairy family is finding quaint pays better than efficiency.

LAURA RANCE / WINNIPEG FREE PRESS Dairy producers in the Eifel region of western Germany are changing with the times as the European Union’s regulations are overhauled.

Elmar and Iris Victor didn’t listen to the experts who told them to expand their dairy herd. Instead, they opted to convert their old dairy shed into vacation apartments.

“It was a question of what we would do because the income was not sufficient from 40 cows,” Iris said through an interpreter. Offering urbanites a week on the farm where children can ride ponies, play in a forest and milk a pretend cow surrounded by the aroma of a working dairy farm has proven far more lucrative.

Despite their success, both families remain uncertain about their future. Europe’s Common Agricultural Policy, which has underpinned the rural sector on the continent for generations, is offering farmers less support all the time. Global competition is fierce.

Legge has some advice for Canadian dairy farmers contemplating a deregulated market in exchange for access to export sales. “It would be the greatest mistake farmers can do,” he said.

Laura Rance is editor of the Manitoba Co-operator and editorial director for Farm Business Communications. She can be reached at laura@fbcpublishing.com or 204-792-4382

Laura Rance

Laura Rance
Columnist

Laura Rance is editorial director at Farm Business Communications.

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