Lactalis, the world's largest dairy company, has announced a significant reduction in its milk collection volumes in France, aiming for nearly 9% less by 2030, which translates to approximately 450 million liters.

This decision stems from ongoing conflicts over milk pricing with French producers, prompting Lactalis to decrease its reliance on international milk markets where prices are lower.

The company plans to implement this reduction gradually from late 2024 to 2030, with the first phase affecting 320 million liters primarily in the eastern and southern regions of Pays de Loire by 2026.

An additional 160 million liters will be cut due to the non-renewal of a contract with the Unicoolait cooperative, which is set to expire by 2030.

This reduction is expected to have significant negative impacts on hundreds of dairy farmers across France, raising concerns about the future of dairy herds.

In light of these changes, Lactalis aims to refocus its strategy on higher-value consumer products sold domestically, which are less susceptible to global market fluctuations.

Earlier this year, Lactalis had reached an agreement to raise the price paid to farmers to 425 euros per 1,000 liters, reflecting the cost of production amidst previous pricing disputes.

Farmers, represented by organizations like the FNSEA, are advocating for fair pricing and a more structured negotiation process with processors to address these challenges.

Arnaud Rousseau, president of the FNSEA, criticized Lactalis's announcement as a 'detonation' for the dairy sector, expressing deep concerns for the future of farmers and their livelihoods.

In response to the impending changes, Lactalis is currently in discussions with producers' organizations to find suitable support measures for affected farmers.

While Lactalis has faced challenges in the global market, particularly in exports, the company reported an increase in revenue and an 11% rise in net profit in 2023.

The company is adjusting its product mix, which currently consists of 50% consumer products sold in France, 20% exported consumer products, and 30% industrial products, to better align with domestic demand.