Milk price crisis a chance for small dairy producers

(Ants Liigus/Pärnu Postimees/Scanpix)
6/6/2016 11:47 AM
Category: Business

The overproduction of milk in the European Union as well as the loss of the Russian market have caused a price collapse. The developments, surprisingly, have given small dairy producers a boost.

Large producers have been taking advantage of the situation. This means that the price of milk per liter has decreased to a point where for many small producers, it now makes sense to process the milk they produce themselves, rather than to sell it to larger companies.

Meelis Mõttus of Metsavenna farm in Võru County told ERR’s radio news that though it would have made sense to think about the marketing of milk and cheese already years ago, there hadn’t been much need for it, as the price of milk had still been high enough.

The changes in the market had forced milk farmers to become more active, Mõttus said. His own farm is now packing milk in different amounts, and has increased its cheese production as well.

Up to this point, Mõttus worked with regional shops to sell his products, but now he’s looking to Europe to expand. Small producers hadn’t yet looked at the possibility of moving into the European market, as it was generally believed that this strategy was a better fit for large producers.

There are about 30 small dairy producers in Estonia. Mirjam Pikmets of the Small Dairy Producers’ Union, which includes 18 of these producers, confirms that about a third have managed to enter larger-scale trade.

Pikmets said that the small producers had decided to no longer look east to find markets for their products. Instead, they were now looking at the business of comparable European producers. The aim was to have a few small dairy producers in every region, which would make it possible to preserve a rural lifestyle with a long history, and also to make the business fairer again.

Currently farmers earn near to nothing on their work, while large dairy producers have very comfortable margins.

Editor: Dario Cavegn

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