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Hard blow for latte lovers, the price of milk will continue to rise



Already at a very high level, the price of milk will increase further due to the ongoing historic drought in France, as farmers no longer have enough grass to feed their cows, with cascading consequences on the whole Dairy products. “The price increases, which have existed for several months, will continue on dairy products”says Benoît Rouyer, economic director of the National Interprofessional Center for Dairy Economics (Cniel).

In one year, a succession of shocks fueled inflation on food products, between the rapid post-Covid recovery and the war in Ukraine. For dairy products, the price of yoghurts increased by 4.5% between June 2021 and June 2022, semi-skimmed milk in cartons or bottles by 4.5%, butter by 9.8% and cheese from 5.2%.

“Bad news for the consumer, we do not see inflation falling on dairy products in the coming weeks”, continues the economist. Global warming has also had a very concrete impact. First there was an abnormally hot and dry month of May, then three heat waves in June, July and early August. The drought is “the strongest of the last 70 years”notes Christian Huyghe, Scientific Director of Agriculture at Inrae.

As a result, grass production fell by 21% on July 20 compared to normal, at a time when dairy cows feed largely on pasture, according to data from Agreste, the statistical service of the Ministry of Agriculture. ‘Agriculture.

When the grass in the prairies is no longer green, herders have three options: dip into their stocks of fodder planned for the winter, buy animal feed, or sell part of the herd to reduce their loads. As feed prices for dairy cows increased by 25.9% in May compared to May 2021 according to Agreste, many breeders agree that the most profitable thing is to part with some of their animals.

One euro per brick?

There will still be milk on the shelves, but a “lack of milk” could be felt, believes Benoît Rouyer. “Overall, a lack of milk will lead to a reduction in the possibilities of producing butter, cream, milk cartons, cheeses… And when you have a lack of product, regardless of the sector, there is an impact on the price”he explains.

With a subtlety: in the current agri-food system, trade negotiations on food prices take place once a year and the prices at which distributors (hypermarkets and supermarkets, etc.) buy milk from producers do not automatically rise in line with cost increases. of production suffered by breeders.

Negotiations were reopened in the spring, and the National Federation of Milk Producers (FNPL) is asking that the liter of milk sold on supermarket shelves approach the euro by the start of the school year. “against 78 cents at hard-discount”according to observations their network conducted this summer.

In 2021, the prices of cow’s milk paid to producers amounted to around 390 euros per 1,000 liters on average, up 4.3% compared to 2020. If the price rose to 427 euros in May 2022, the unions claim that this new price still does not cover their production costs and demand further increases.

In comparison, “in Germany, a tonne of milk costs 480 euros, in Belgium it is around 500 euros and in the Netherlands it goes up to 540 euros per thousand litres”, explains Thierry Roquefeuil, president of the FNPL. If France does not reach the levels of its European neighbors on the price of milk, the federation threatens to switch to “a trade unionism of destruction” back to school, he warns.




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