Recently in Germany and other European countries there have been milk farmers protesting against the low milk price.
IMHO, protest and demostration brings nothing. The price is largely decided by the relationship of demand and supply. If the price stays steadily low, that means the supply is too large. The milk farmers can see a price rally in months if they reduce the production now. Economic 101 that is.
Instead of wasting time on protest and demostration, they could have done the following things:
- Find another business that is more profitable than feeding and milking cows, if they are not too reluctant to change.
- If they want to stay in the milk business, they could let go some cows, fire workers to cut the operative cost and raise the milk price.
It is a common mentality here that people want to find a job / business and do the same thing for their whole life. If, for any reason, that job or business can no longer exist, they think it’s the society’s fault, instead of adapting themselves to the new economy, they go to street, protest against any factory shutdown, and ask the government “How can I feed my family if this factory/shop shuts down?”. I didn’t make up the story, you can see it from German news every once in a while. Well, IMHO, the German government is already taking very good care of ordinary workers/farmers, there are many possibilities to learn new skills in all kinds of schools (Some of them are tuition-free for new jobless people). Really, the government has already done its part terrificly, the workers / farmers should really think about taking responsibilities of themselves sometimes. Before they ask the Verdi or the government this question “How can I feed my family if this facotry/shop shuts down?”, they should really ask themselves the same question. Possibilities are there, people should just be a little more actively and aggressively seeking.
If I was a milk farmer, I would sell off my milk business and seek another way out. Market research isn’t really as “professional” as it sounds like. One can get a pretty good idea about what makes good money what not, by just spending half day in weekly farmer’s market and another half day in a big super market.
Yesterday I bought 2 boxes of soy milks from E-Deka. The price was evil: 1.99 euro per liter. The same thing costs about 0.10 euro per liter in China, about double the normal milk price in USA. So the high price of the soy milk here in Germany definitely does not lie in production cost. At the other hand, soy milk definitely has a market in Germany: Look at here. So, if I were a milk farmer, I would very likely sell off my cows, buy soy beans and anything that is needed to produce soy milk, and hire a seasoned salesman and a seasoned Miss Marketing. I would send the salesman to many fitness centres, Praxises, clinics, and super markets. His job is to bring me a lot of contracts, and fix a reasonable price. Miss Marketing is responsible to write articles about how healthy the soy milk is and get the articles published to a lot of popular media, organizing flashy events to help the people recognize soy milk, and build up a deep and wide relationship network with key figures in important sales chanels such as E-Deka, Lidl, Aldi, Schlecker, Rossmann, etc. It may really take a while until many native Germans start to drink soy milk, however, in cities like Hamburg (4000+ registered Chinese), Munich (4000+ registered Chinese), Düsseldorf ( has the biggest Japanese community in Germany), etc., a reasonably priced soy milk product will immediately sell well. I would view this as a very good opportunity and start the business without any delay. If the initial capital is not enough after selling my cows, I would take a loan from bank or write a convincing business proposal and send it to some suitable angel investor or venture capitalist.
Above is just one of the possible things a sad milk farmer could do instead of protesting in the street. I’m not familiar with the commodity market yet, so, no other ideas come to me for now. I wish every unsatisfied milk farmer could find a way out in the current milk bear market.
