The price of dairy products in Europe is expected to take a sharp move upwards, as farmers try – and fail – to meet a surging demand, predominantly from China and India. In Germany, consumers are being warned to expect a 50 per cent rise in the cost of butter, 40 per cent in the cost of cheese, and up to 20 per cent for milk itself. Dairy producers have been caught on the back-foot by rising living-standards in China, India and the Middle-East, which have led to a change in eating habits there.
But many farmers in Germany – the EU’s biggest milk producer – have been turning their backs on dairy herds in favour of the higher returns they get from cereals. Farmers in the second biggest producer, France, have been lured by the better profits offered by raising beef. And droughts in other milk-producing parts of the world have led to a gap in the dairy market between supply and demand.
Europes braces itself for big dairy price rises