|
Abstract:
This article considers the challenges that may lie ahead for dairy producers over the next ten years, such as trade policy reform, other market developments and changes in input costs. It examines the present competitive position of the dairy sector in a number of EU Member States. Milk price and input cost projections are developed using the FAPRI-Ireland, FAPRI EU GOLD model and FADN data on farm level costs. In turn these allow the projection of how cost to output price ratios might evolve over the next ten years in the absence of structural change, thereby indicating the extent of structural change required. The results suggest that the phasing out of export subsidies, a reduction in import tariffs for dairy products and rising input costs would have serious ramifications for the viability of dairy farming across the EU. Furthermore, the results suggest that significant structural change will need to occur in dairy farming sectors across the EU. It is concluded that the future ability of many EU Member States to sustain current milk production levels will be largely dependent on the efficient transfer of resources between exiting farmers and those wishing to expand production
|
