In Holland, some 60% of dairy farmers who had planned to make investments and improvements in their operations in 2009 are cancelling those plans for now.
Lower milk prices, uncertain markets, higher interest rates and banks unwilling to lend money during these times are all being blamed as reasons for the pull back.
In addition, a much anticipated and hyped European futures market for milk and dairy products has also been shelved. With low dairy commodity prices on the European spot market, interest in trading contracts in futures has also disappeared.
The European Union's plan to reinstitute export subsidies for butter, cheese and milk powder went into effect last week. European dairy farmer unions, which oppose doing away with milk quotas, cite the move back to export subsidies as confirmation that freeing farmers to produce as much milk without quotas will fail.