Global trends in milk production and trade: The impact on the European milk market

The extremely instable milk price development in the last decade has changed the production, investment volume and the trade positions in milk sector in many countries. The price growth on 30% in 2007 and fall in 2008, increased the risk especially for the producers with low technology, making small business in this sector unprofitable. This instability hardly affects European milk producers during the reduction of the EU protection of milk market. The goals of this paper are to eliminate the major reasons for the price instability on the global milk market, and to show how the changes in the global prices, production and trade impact the milk market in the European Union.