The annual survey was conducted in January after much of the recent international milk price recovery had taken effect. According to results published by the European Milk Board (EMB) on Tuesday, the average farmgate price in Germany was 33.76c/kg while production costs were 43.74c/kg. This means the price covered only 77% of production costs, leaving farmers reliant on direct payments to make up the shortfall.

This is an improvement on last year when the price covered only two thirds of costs. In the eight years since the start of German dairy profitability surveys, the price never covered the costs fully.

Germany is the EU’s largest milk producer.

The study was commissioned by the German dairy farmers’ union MEG Milch Board and the EMB, which brings together MEG and other farming organisations across the EU, including Ireland’s ICMSA. The consultancy Büro für Agrarsoziologie & Landwirtschaft produced the analysis using data from the European Commission’s Farm Accountancy Data Network (FADN) and milk prices reported to the German Federal Statistics Office.

Since the end of milk quotas, the EMB has referred to the low profitability figures to advocate for a European “market responsibility programme”, including obligatory production cuts during oversupply crises.

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The European Milk Board’s latest analysis of dairy profitability in Germany shows that the recovering milk price remains below production costs.