EU: Abolition of milk quotas will create significant opportunities | Progresiv
The EU milk quotas that were set in 1984 when there was a huge milk and butter surplus, will end. Many farmers and dairy cooperatives are looking forward to the change, which will lift any restriction on how much milk they produce. 
However, while some reports suggest an air of excitement and opportunity, the current over production, the Russian import ban and China’s less than enthusiastic imports, as well as a crisis involving milk prices, beg the question of whether anyone will really benefit from being allowed to draw unlimited milk.
A report published by the US Dairy Export Council (USDEC) predicts that milk production will increase by 11% in the years following the quota removal, and that most of this production (76%) will be concentrated in six Northern European countries, namely Ireland, Denmark, Netherlands, France, Poland and Germany. It expects that by 2020, the EU will produce 15.4 million metric tonnes more milk than in 2014.
The study further predicts that much of the production will be processed into commodities such as cheese, with production increasing by 660,000 metric tonnes by 2020. Whey, butter and milk powders are also predicted to increase significantly.
At its introduction, the quota regime was one of the tools used to overcome these structural surpluses. Successive reforms of the EU's Common Agriculture Policy have increased the market-orientation of the sector and, in parallel, provided a range of other, more targeted instruments to help support producers in vulnerable areas, such as mountain areas where the costs of production are higher. The final date to end quotas was first decided in 2003 in order to provide EU producers with more flexibility to respond to growing demand, especially on the world market. It was reconfirmed in 2008 with a range of measures aimed at achieving a "soft landing". Even with quotas, EU dairy exports have increased by 45% in volume and 95% in value in the last 5 years. Market projections indicate that the prospects for further growth remain strong – in particular for added-value products, such as cheese, but also for ingredients used in nutritional, sports and dietary products. (www.foodingredientsfirst.com)
