Falling prices and production costs that exceed sales prices have placed the dairy sector under serious strain. A number of EU member states are now calling on the Commission to intervene.

At a meeting of the EU’s Agriculture and Fisheries Council on 30 March, several member states raised the alarm over conditions in the milk market. Belgium and Slovakia were among the most vocal, drawing support from a number of other countries in their calls for action.

The backdrop is a supply that has outpaced demand. Deliveries within the EU reached approximately 135 million tonnes in 2025, up from 133.7 million tonnes the previous year, according to the EU’s Milk Market Observatory. Weaker growth in demand has weighed on prices: in January 2026, the EU average stood at €45.15 per 100 kg, representing a fall of 15.9 per cent compared with the same month the year before.

Production running at a loss
In its submission to the Council, Slovakia describes a situation in which the economics no longer add up for producers – with costs exceeding sales prices by around €0.10 per kg.

“The current situation requires not only further monitoring, but calls for active and immediate intervention at EU level. Without a swift and coordinated response, there is a risk of further losses in primary production, deteriorating liquidity on farms, and a weakening of the entire dairy sector,” the submission states, with the backing of Bulgaria, Hungary and Italy.

Belgium has been particularly hard hit, with prices dropping by around 30 per cent over the course of a year and now sitting among the lowest in the EU.

Exports and crisis tools
The price decline has been driven by a combination of trade policy uncertainty and geopolitical tensions. China has tightened access for certain dairy products, and the ongoing trade dispute with the United States is weighing on the market, while energy and production costs remain elevated.

The response called for by several member states centres on EU-level measures: a voluntary and temporary reduction in production, direct support for producers, and adjusted intervention prices. There are also calls for stronger export promotion initiatives and an update to market instruments that have not been revised since 2003.

By Maja Løvstrup
Source: Effektivt Landbrug
Photo: Maxim Hopman, Unsplash