Milk, grain producers seeing profits, pork producers losses this year

Cartons of milk on shelves at the Maxima grocery store in Räpina. July 27, 2022.
Cartons of milk on shelves at the Maxima grocery store in Räpina. July 27, 2022. Source: Aili Vahtla/ERR

Farmers in Estonia are pleased by the current purchase prices of milk and grains. Pork producers are currently operating at a loss, however, as meat prices on the world market have fallen below production costs.

According to Roomet Sõrmus, chairman of the board of the Estonian Chamber of Agriculture and Commerce, Estonian milk producers are rather optimistic heading into this upcoming fall and winter. The purchase price of milk has increased significantly over the past year.

"The purchase price of milk in Estonia has reached approximately 47-48 cents," Sõrmus said. "If we compare that with a year ago, that's an increase of nearly 50 percent. The purchase price of milk last June was around 31 cents. We definitely have to bear in mind, of course, that 2021 was rather a mediocre year for milk producers."

Based on the first half of 2022, the milk market has certainly been a pleasing one for farmers this year, he continued.

"It's allowed them to compensate for old losses as well as think about investing," he said. "As all production costs have increased drastically, however, then it's important for farmers that these milk prices remain steady in the near future as well."

Sõrmus said that the increase in the price of milk on the world market hasn't even reached store shelves yet.

Grain purchase prices have been more unstable, meanwhile, and will depend primarily on the summer harvest. He believes, however, that grain producers will likewise remain profitable.

The price of pork on the world market has risen as well. Anu Hellenurme, executive director of the Estonian Pig Breeders Association, said that it currently stands at around €1.85 per kilogram.

According to Hellenurme, just a few years ago this would have been an incredible price for producers; by now, however, the situation is complicated, as input prices, including electricity and cereal grains, have gone up.

Producers are currently selling pork below cost, which is €2.00-2.50 per kilogram.

"Spain had previously been directed at the Chinese market," she explained. "As China has made market corrections and isn't buying meat from Europe anymore, Spain is now seeing overproduction. This has brought the price of pork down too."

Hellenurme said that pork producers have been operating at a loss for the past year already. Nonetheless, they can't sell what they produce for more than the world market price.

"The current business model is built on imported meat, i.e. we're on the free market," she said. "If pork is coming into Estonia at market prices, no one's going to buy for more than that. Although Estonian pork is significantly cleaner than Polish or Spanish pork, and we use much less antibiotics, for example."


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Editor: Aili Vahtla

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