German dairy industry demands higher prices as raw milk hits five-year low
The Milchindustrie-Verband is calling for substantial price increases on drinking milk, yogurt and quark, with the first contract talks already under way. The association says the milk price is about a quarter below last year and at a five-year low, while demand at home and abroad remains strong. Drought in Europe and an expected El Niño effect are tightening supply for an industry that exports 49 percent of its output.
Germany's dairy processors are pressing for substantial price increases on fresh dairy products, and the first contract negotiations are already under way. The Milchindustrie-Verband (MIV), which represents the country's dairy industry, said significant price rises for dairy products were urgently necessary, according to Deutsche Presse-Agentur. Talks on the so-called white line — drinking milk, yogurt, quark and comparable fresh products — have started, but the association gave no concrete figures, citing the ongoing discussions.
Raw milk price at a five-year low
The association bases its demand on a widening gap between raw material returns and demand. According to the MIV, the milk price is currently around a quarter below the level of the same period last year, its lowest in five years. At the same time, sales of milk and dairy products are running very well both in Germany and internationally.
Movements at retail have been uneven across the dairy shelf. Butter has already shown signs of a turn: after a steep fall at the end of 2025 that briefly pushed a 250-gram pack below one euro and prompted protests by farming associations, prices recovered. Supermarkets and discounters raised own-brand packs by 14 cents to 1.19 euros in mid-September, ad-hoc-news.de reported. Fresh whole milk, by contrast, has held broadly stable at about 95 cents per litre through the year. Returns on cheese, milk powder and protein products have also improved.
Drought and El Niño tighten the supply side
Supply and demand are moving in opposite directions. The summer drought in Germany and other parts of Europe caused milk deliveries to fall sharply in some regions. Beyond Europe, many experts expect a strong El Niño effect in the tropical Pacific to weaken global milk deliveries markedly, because the weather pattern can trigger drought in important dairy export regions.
That exposure carries unusual weight in Germany. According to the Bundesverband des Deutschen Lebensmittelhandels, 49 percent of the dairy products manufactured in the country are exported, so international developments feed directly into the German milk price. Shifts in cheese, milk powder, whey and protein products therefore move returns along the entire chain.
Protein boom drains whey supply
Demand for milk protein is a second driver. Kerstin Keunecke of the Agrarmarkt Informations-Gesellschaft (AMI) points to the protein boom: whey protein concentrates are in strong demand, while the whey concentrate needed to make them is scarce and expensive. Whey is the liquid by-product of cheesemaking, which ties its availability to cheese output rather than to fluid milk sales.
Farmers demand pass-through to the farmgate
Producer groups want any recovery to reach the farm. Karsten Schmal, vice-president of the Deutscher Bauernverband and its dairy president, said the association demands that the recovery of dairy markets in the coming years be passed on to producers promptly, because fertiliser, energy and fuel costs remain a considerable burden on farm businesses. Anyone who wants high-quality dairy products from domestic production in future, he said, must ensure that rising returns are distributed fairly along the value chain and reach milk producers. The Bundesverband Deutscher Milchviehhalter took a similar line: given declining milk deliveries and clearly better demand, particularly for milk protein, a spokesperson called the demand for higher drinking milk and quark prices highly appropriate. How much consumers eventually pay, and from when, depends on the outcome of the contract negotiations and on how increases are passed along the value chain.
