Environmental restrictions accelerate cattle herd reductions across the EU

Stricter environmental requirements, new taxes and rising production costs are putting additional pressure on the European Union’s livestock sector. The most significant changes are taking place in the Netherlands, Denmark and Germany, where government policies aim to reduce greenhouse gas emissions, limit environmental pollution and improve animal welfare standards. According to USDA FAS, tighter environmental regulations combined with declining farm profitability could accelerate reductions in cattle numbers and lead to the closure of some dairy farms.

In the Netherlands, the European Commission approved a compensation scheme in April 2026 allowing dairy farmers to voluntarily reduce their herds by 10–20% while maintaining their grassland area. The programme is expected to reduce the national herd by approximately 64 thsd cows. Some farmers have already reduced their herds following the withdrawal of an EU exemption allowing higher manure application rates on agricultural land. Environmental requirements and declining dairy profitability since early 2026 are putting further pressure on producers.

Separately, the Dutch government has proposed a €20 bln environmental programme running until 2035. It would introduce ammonia emission limits for individual farms and establish a maximum stocking density of 2.6 livestock units per hectare. The proposal also includes special buffer zones around Natura 2000 protected areas. The new rules could affect around 4 thsd livestock farms, primarily dairy operations. However, the proposed measures still require approval by the Dutch Senate.

Denmark is also tightening environmental regulations for livestock farming by introducing a carbon tax on dairy and beef producers. Under a climate agreement adopted in November 2024, the tax burden is expected to reach approximately €130 per cow annually, while 15% of agricultural land is set to be gradually converted into forest. According to USDA FAS, these measures could encourage farm consolidation and more intensive livestock production after 2027, as smaller farms may find it increasingly difficult to adapt to higher costs.

In Germany, strict environmental standards and the growing adoption of animal welfare programmes are also contributing to declining cattle numbers. In particular, retailer requirements call for more space per animal, forcing farms to invest in additional facilities or reduce herd sizes. Overall, tighter environmental policies across EU countries could accelerate structural changes in dairy and beef production, encouraging consolidation among larger operations and gradual herd reductions at farms unable to adapt to the new requirements.

Tags: EU, cattle, live cattle