MILK PRICES IN THE EUROPEAN UNION BY 2025 AND PROJECTION OF THE PROFITABILITY OF MILK PRODUCTION IN POLAND IN 2020

Abstract

In Europe, more than 70% of milk production falls on the European Union
countries. Among the largest milk producers in the EU, Poland ranks fourth. The
abolition of quotas for milk production and increase in supply to the market
contributed to the decline in milk prices. The aim of the study is to determine the
impact of the rate of change in prices of agricultural inputs and changes in milk
yield of cows and milk prices on the profitability of milk production in Poland
projected for 2020. The sample consisted of 169 farms which in 2014-2015 kept an
average of 27 cows. In 2015, the index of the profitability of milk production
amounted to 130.7%, and in comparison to 2014 it decreased by 18.4 percentage
point. The results projection for 2020 show an improvement in milk yield of cows
(by 12.4%) and milk prices (by 15.4%). Stronger growth in the revenues (by
29.1%) than the cost of keeping cows (by 15.5%) will stimulate the improvement
of economic results. The index of the profitability of milk production will increase
by 15.4 percentage points, and income per cow by 73.3%. This means that it will
be at a level similar to 2014. Research shows that fluctuations in selling prices of
milk are possible (+/-8.7%). Despite this, the milk production will continue to be
profitable. Results of this study are consistent with the projection of the European
Commission, which provides for an increase in milk prices and milk production in
the EU.