Regulatory Overhaul To Address Supply Constraints

Cyprus has entered a critical phase in the regulation of PDO halloumi production as authorities attempt to balance European Union requirements with the ongoing livestock crisis affecting the island.

Starting Friday, a new decree will reduce the minimum proportion of goat and sheep milk required in halloumi production from 25% to 15% until the end of 2026. The measure was introduced by the Ministry of Agriculture through accelerated procedures coordinated with the European Union following the impact of the recent hemorrhagic fever outbreak on livestock production.

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Livestock Crisis And Its Economic Impact

Data from the Department of Agriculture showed that the outbreak, which began in February 2026, resulted in the deaths of 40,128 goats and sheep as well as 2,816 cows across 109 farms, contributing to an estimated 10% decline in overall milk production.

Goat and sheep milk output dropped sharply in April 2026 to 7.35 million litres, marking a 24.6% decline compared with 9.76 million litres recorded during the same month in 2025. At the same time, cow milk production increased by 4.08%, reaching 28.38 million litres despite the culling of around 3,000 cows. These figures have raised doubts over earlier Agriculture Ministry forecasts that projected a 15% increase in goat and sheep milk production alongside a 12% increase in cow milk output.

Statistical Evidence And Comparative Trends

Additional analysis from the Department of Agriculture’s Intermediate Software system further highlighted the ongoing decline in goat and sheep milk production. Production reached 9.07 million litres in March 2025 compared with 8.34 million litres in March 2026, representing a reduction of just over 8%, while officials also linked the decline to broader pressures, including extreme weather conditions, water shortages and recurring disease outbreaks affecting the agricultural sector

Industry Dynamics And Stakeholder Perspectives

The halloumi market currently operates through two main production models: traditional PDO halloumi produced exclusively from goat and sheep milk, and mixed-production halloumi incorporating cow milk once the regulatory minimum ratio is satisfied. Industry representatives said the shortage of goat and sheep milk has intensified pressure on producers attempting to maintain PDO standards, particularly following the recent outbreak.

During a meeting chaired by Michalis Damianos on April 30, 2026, cheesemakers, livestock farmers, and agricultural organisations discussed revised milk ratios and supply limitations, while also confirming that cow milk allocation for halloumi production remains capped at 234 tonnes annually, equivalent to 19.5 tonnes per month. Officials noted that cow milk allocated for halloumi production in April exceeded the permitted monthly threshold by approximately 10%, further highlighting growing pressure across the sector.

Market Implications And Strategic Challenges

Cheesemakers argued that maintaining the previous 25% requirement had become unrealistic under current production conditions, while agricultural organisations warned that the ongoing livestock crisis is creating additional uncertainty across the wider market.

Cattle farmers also expressed concerns that lower cow milk participation in halloumi production could affect export volumes and international demand, whereas goat and sheep farmers called for stronger government support aimed at rebuilding livestock populations affected by the outbreak.

Future Outlook And Regulatory Deadlines

The revised 15% minimum milk ratio will remain in effect until December 31, 2026, although broader long-term PDO targets have not changed. Under existing regulations, goat and sheep milk must again become the dominant component in PDO halloumi production by July 2029. However, continued disease outbreaks, climate-related pressures and production shortfalls are increasingly raising concerns within the industry over whether those targets can realistically be achieved within the current timeframe.