High milk yield per cow does not always lead to high margins in a quota situation and optimizing milk output from forage is one of the keys to profitable dairying. Detailed blueprints for very efficient milk production from grass have been developed in Ireland and are widely used. Heavy reliance on grazed grass for milk production seems to limit milk yield per cow due to limits on grass dry matter intake. Efficient grassland management is a very demanding skill and is very difficult to implement. Policy for almost all agricultural commodities, including dairy production, is established centrally at European level.
Milk produced in excess of quota is subject to penal levies and is effectively confiscated.
Of major concern and a cause of continuing uncertainty to EU dairy farmers is what will happen in future World Trade Agreements. Dairy farmers are worried about the impact these changes will have on their milk quotas, but are even more concerned about what may happen at the beginning of the next millennium when the next round of the World Trade Agreement is due to take place. Some consideration is being given to the possibility that EU dairying might be better served by abandoning producer quotas, accepting lower milk prices, and aggressively expanding milk production in the more suitable dairying areas. Austria, Finland, and Sweden joined the EU in 1995 bringing an additional 1.7 million dairy cows. It is not meaningful to consider EU dairying as a single entity.