Upswing on the horizon for dairy farmers

The EU estimates that the Danish dairy production in the coming years will rise by 12.5 percent

The future is looking bright for the Danish dairy farming industry thanks to a combination of EU law changes and increased demand from markets abroad.

An explosive demand for dairy products in China has pushed Danish dairy prices sky-high and in a year the EU dairy quotas will end and a potential export adventure can kick off for the Danish dairy industry.

“According to what statistics and predictions have conveyed thus far, it looks like the demand for milk will increase faster than the production,” Steen Nørgaard Madsen, a farmer and head of the dairy association, Mejeriforeningen, told Politiken newspaper.

The EU estimates that Danish dairy production in the coming years will rise by 12.5 percent, although that figure could prove pessimistic should milk prices remain high, according to Kjartan Poulsen, the head of Danish dairy producers.

READ MORE: Chinese milk means big gains for Arla

Braced for demand
Arla, the largest dairy producer in Northern Europe, is prepared to increase production and it expects to produce a billion kilos more milk annually when the EU quota system ends next year. In particular, the markets in Asia have been identified as a lucrative market by the Danish dairy giants.

“The middle class is growing quickly in a lot of Asian countries, as well as other parts of the world, and milk and dairy products are often among the first to be added to one's existence,” Jais Valeur, the executive vice president of Arla Foods, said.

Last year the milk producers in Denmark, of which there are close to 2,000, exceeded the EU quotas by 101.5 million kilos of milk and were forced to pay a record fine of 211 million kroner to the EU.