The European Union’s dairy industry continues to face mounting challenges, including high input costs, relatively low milk prices, and restrictive environmental regulations, according to a recent report by the US Department of Agriculture’s Global Agricultural Information Network (GAIN).
Milk prices, which peaked in 2022, dropped significantly in 2023 and have only partially recovered in 2024. At the same time, Western Europe’s dairy producers are contending with disease outbreaks and regulatory constraints that have limited production capabilities.
Regulatory Shifts Hit Herd Sizes
In the Netherlands, the loss of the EU derogation allowing surplus manure spreading has led farmers to cull parts of their dairy herds. Similarly, Ireland’s reduced nitrate derogation has triggered a shift, with cuts in the beef herd aimed at preserving dairy operations.
Disease Outbreaks Compound Challenges
Outbreaks of Bluetongue Virus (BTV-3) and Epizootic Hemorrhagic Disease (EHD) have further strained the sector. While symptoms of these diseases are typically mild in dairy cows, they often result in temporary milk yield declines, fertility issues, and increased mortality rates. This has contributed to a lower calf-to-cow ratio and higher herd losses in 2023, with similar trends projected for 2024 and 2025.
BTV-3 has been reported across Northwestern Europe, including Northern France, the Netherlands, Belgium, Germany, and recently Denmark. Meanwhile, EHD has primarily impacted Spain and France.
Weather and Feed Shortages Add Pressure
Adverse weather conditions during the spring and early summer of 2024 forced farmers in Northwestern Europe to keep cattle indoors longer than usual, disrupting local fodder production. The combination of poor feed availability and disease outbreaks is expected to lead to significant reductions in dairy cow herds, particularly in France, Germany, the Netherlands, and Belgium.
The EU dairy sector faces a difficult road ahead, with tight margins and a host of structural and environmental challenges threatening the stability of the industry.
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