German Milk-Quota Price Falls to Record as 2015 Phase Out Nears

The price of German milk-production rights fell to a record low as farmers anticipate the end of the European Union’s quota system in 2015, agricultural lobby Deutscher Bauernverband reported.

The right to produce a kilogram (2.2 pounds) of cow’s milk in Germany sold for an average 1 euro cent ($0.013) at auction today, falling 4 cents from November, the Berlin-based DBV wrote in a report on its website.

Farmers in Germany, the EU’s biggest milk producer, trade milk-production rights three times a year. Prices have dropped from 23 cents a kilogram paid in April 2009.

The price drop “shows that the German dairy farmers are integrating the impending expiration of the milk quotas in their operational planning,” the DBV wrote.

The price to produce milk fell 4 cents to 1 cent a kilogram in western Germany and declined 2 cents to 1 cent in the eastern part of the country, according to the DBV.

Farmers traded rights to produce 124,907 metric tons of milk, according to the auction report, with an offer for 317,742 tons of quota exceeding demand of 172,865 tons.

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