Structure, economic situation, and perspectives of bovine production in Germany

The European Union is pursuing a course of step-wise liberalisation of the dairy and beef markets. A question on the economics of bovine production in Germany naturally follows. Economics based studies indicate that the disad vantages of holding size, as a result of demographic structural changes, ca n be reduced by 0.1 to 0.15 DM per kg of milk. Improvements in the quantity and quality of milk constituents is possible and the properties of beef pr oduction and other traits will reduce the unit costs by 0.04 - 0.05 DM/kg m ilk per 1,000 kg increase of milk production per year and cow. German dairy production, freed from quotas, is competitive on the world market. The low cost input countries, such as New Zealand, only supply 3% of the total wor ld milk production and they have limited potential for expansion. It is nec essary, therefore, to supply a substantial proportion of the U.S. and Europ ean demands even in a liberal market. In comparison, there is less scope fo r expansion of beef production in Germany as the potential for expansion in the low-cost beef production countries is much greater than for dairy prod uction.