EU milk production expected to decline in 2024

 A modest improvement in cow productivity is insufficient to counteract additional reductions in the dairy herd. Persistent declines in farmgate milk prices, coupled with consistently high production costs, continue to exert pressure on dairy farmers, particularly in major producing member states such as Germany, France, Spain, and Poland.

The impact is more pronounced among smaller farms that lack the capacity to capitalise on efficiencies of scale or organised negotiating power with processors to drive competition for portions of the milk pool. 

Notably, producers are also grappling with adherence to environmental regulations. Initiatives such as the Dutch government's nitrogen emissions cap and the Irish government's proposed voluntary payment scheme to incentivise dairy cow slaughter add further complexity. 

These factors are expected to lead to further market consolidation and closures among smaller producers. However, larger operators are anticipated to maintain herd numbers, thereby slowing the pace of herd reduction in 2024.