Already at a very high level, the price of milk will increase further due to the historic drought underway in France. The lack of fodder has cascading consequences for all dairy products.
“The price increases, which have existed for several months, will continue for 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%.
Declining grass production
“Bad news for the consumer, we do not see inflation falling on dairy products in the weeks to come,” 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 worst in 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.
“Farmers take in their winter stocks”
“The meadows are yellow, brown, the cows, the sheep, have nothing to eat, there will be damage over time. Farmers take in their winter stocks, there will be cash flow problems to feed all mouths, ”said Christiane Lambert, president of the FNSEA on BFM Business on Tuesday.
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. “Some will be tempted to sell their animals,” confirms Christiane Lambert, who does not endorse the initiatives taken by some farmers to water their crops despite the bans. “I do not endorse people who defy the bans, but these decisions must be made in consultation”.
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 price,” he explains.
The liter to one euro?
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 in hard-discount”, according to the observations that their network conducted this summer. “All the costs of farmers are increasing, if there is no increase in the selling price of our products we will be in the red”, pleads the FNSEA which asks distributors to increase the price of milk in France. Asked about France Inter on this subject, Dominique Schelcher, managing director of System U, said he was “open to this discussion”.
Threat of a “trade unionism of destruction”
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” at the start of the school year, he warns.
