Do co-operatives protect farmers against price volatility?

Published 11 May 16

The significant drop in milk prices over the past couple of years has led some to question whether price volatility at farm level is impacted by the proportion of milk sold through co-operatives.

The Milk Market Observatory recently released data on the proportion of milk deliveries covered by co-ops in each Member State. This has allowed for a comparison against farmgate price volatility to see if co-ops shelter their members from market movements. The degree of price volatility in each Member State was measured by looking at the range of farmgate prices between Jan-07 and Feb-16.

coop membership price volatility

Those countries where co-ops account for a large proportion of milk deliveries still showed significant variation in price volatility. This suggests that a higher degree of co-operative ownership doesn’t necessarily shelter farmers from the impact of global prices. It is more likely price volatility is influenced by the mix of products made with the milk and the proportion exported outside of the EU.