Concerns over the worsening European dairy market have intensified, with Hungary calling for urgent and decisive intervention at the EU level. Speaking in Brussels ahead of a meeting of EU agriculture and fisheries ministers, Hungary’s Minister of Agriculture, István Nagy, warned that deteriorating milk prices are placing severe pressure on dairy producers across several member states.
According to the Minister, the sharp decline in milk procurement prices, reportedly falling from around 53 cents per litre to near 20 cents in certain markets,s reflects a deepening imbalance between supply and demand. Such price erosion, he argued, is threatening farm viability and necessitates immediate policy action.
Call for Private Storage Aid
Hungary has urged the European Commission to activate market support tools, particularly the opening of private storage aid for butter and cheese. This mechanism allows surplus dairy products to be temporarily withdrawn from the market, helping stabilise prices during periods of oversupply.
In addition, Budapest is seeking targeted financial assistance to help dairy farmers weather the downturn. Minister Nagy emphasised that dairy producers play a critical role in Hungarian agriculture and rural livelihoods, underlining the political urgency behind the appeal. The issue is not isolated to Hungary. Italy has also requested a dedicated discussion on milk market conditions, signalling that price pressures are being felt widely across the bloc.
Market Pressures and Policy Response
Hungary first raised concerns about the dairy sector at the EU Council meeting in December, but officials say the situation has since worsened. The renewed appeal places additional pressure on the European Commission, which had previously pledged to monitor developments.
The unfolding crisis highlights the vulnerability of the EU dairy sector to price volatility, particularly in the absence of swift market-balancing measures. Prolonged low prices could lead to reduced farm investment, accelerated structural decline in smaller holdings, and long-term supply contraction.
Trade Concerns Add to Sector Anxiety
Beyond immediate market support, Minister Nagy linked the dairy downturn to broader trade policy concerns. Hungary, alongside Poland, Slovakia and Austria, is pushing for safeguards within the proposed EU–Mercosur trade agreement. These countries are advocating the creation of a compensation fund to protect sensitive agricultural sectors that could face competitive pressure from increased imports.
Budapest has also expressed opposition to the provisional application of the agreement before full ratification by member states, arguing that European farmers must be shielded from unfair competition.
CAP and Regulatory Standards in Focus
The broader policy debate at the Council meeting is also expected to cover the future of the Common Agricultural Policy (CAP). Hungary maintains that CAP funding should remain structured under its existing two-pillar framework, with sufficient and predictable financing to support farmers amid global market uncertainty. Additionally, discussions with EU Commissioner Olivér Várhelyi are set to address veterinary and phytosanitary standards. Hungary has reiterated that imported agricultural products should meet the same production and safety requirements imposed on EU producers, framing this as essential to ensuring fair competition.
A Sector at a Crossroads
The renewed calls for intervention underscore the mounting strain within Europe’s dairy sector. With milk prices under sustained pressure and trade uncertainties looming, policymakers face growing demands to balance market liberalisation with protective mechanisms that ensure farm-level sustainability. Whether the European Commission moves swiftly to deploy support tools may determine how deeply the current downturn reshapes the region’s dairy landscape.
