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Dairy farmers get paid below production costs — is it really worth it?

90% of milk producers have gone out of business over the last 20 years

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26 January 2021 07:12 PM

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ACN | Malla

Vicenç Fabré owns a dairy farm in Malla, a tiny village in central Catalonia’s Osona county. Fabré has 180 cows. Malla has 272 inhabitants.  

Fabré’s cows produce around 6,000 liters of milk every day, with the cost of production at 0.34 euros per liter. When big dairy companies buy the milk, it will not sell for more than 0.32 euros per liter.

"If we don’t appreciate how much it costs to produce milk, then we’re killing dairy farming," said Fabré, who is racking up debt to save the business and worries he might not be able to afford paying workers fair wages. He is not alone. 

Over the last 20 years, 90% of milk producers in Catalonia have closed for good, down from more than 4,000 to roughly 400. It is estimated that half of them could shut down in three to four years.

  • "If we don’t appreciate how much it costs to produce milk, then we’re killing dairy farming"

    Vicenç Fabré · Milk producer

In order to meet consumers’ demand for milk, Catalonia has to import it from abroad. But a downward trend in milk consumption suggests that Catalans, like others around the world, are losing their taste for cow milk—and that is hardly good news for local farmers.

In 2016, the average liquid dairy milk consumption in Catalonia was 74.83 kg per year. In 2017 it went down to 61.21. (Kilograms can be roughly translated into liters, considering that the milk is slightly more dense than water.)

The Osona dairy farmers co-op has raised concerns that local milk producers might soon disappear. "Getting paid below the cost of producing milk means we’re losing capital, young people are fleeing, we’re getting old, and there’s no generational renewal," said the association’s president, Sebastià Juanola.

The solution, some dairy farmers believe, is for public authorities to step in and follow France’s example, where the price of milk is set by the government.

In 2020, the Spanish government passed a decree forcing dairy companies to not pay farmers under the cost of production. But Juanola says that "the industry is too powerful" and does not comply with the decree. 

Cheap store brands are 'destroying the market'

Some dairy farmers also urge consumers to consider where the milk they are drinking comes from and whether producers were paid a fair price. "We need to be more aware when we choose what milk we’re buying," said Daniel Bassas from the Plana de Vic co-op, stressing that cheap store brands are "destroying the market."

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  • Cows from a dairy farm in Malla, in central Catalonia's Osona county (by Estefania Escolà)

  • Cows from a dairy farm in Malla, in central Catalonia's Osona county (by Estefania Escolà)

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