The situation in dairy farming is critical!

"Our members are confused about the announcement we received, which has hurt a large part of milk producers, long-time suppliers of Food Union, who are already struggling to survive. The problem is caused by concerns about the experience of previous years - other dairy processing companies followed Food Union's example," said Bērziņš.
The farmers' representative, Aldis Kļaviņš, co-owner of the Ceriņi farm, admitted that the Food Union's notification to his farm stated that the purchase price would be reduced by 1.5 eurocents from August.
"We sell about nine tons of milk a day. The purchase price has already fallen - the farm was paid 22 cents per kilogram of milk, but from now on it will be only 20.5 cents, which definitely does not cover the cost price - at least 24 cents per kilogram. There is nothing left to do but to quickly look for another buyer. Other farmers are also doing this, and the situation is critical," the farmer admitted.
Meanwhile, Normunds Staņēvičs, chairman of the board of AS "Rīgas piena kombināts", part of the "Food Union" group, admitted that the company has been forced to reduce the purchase price of milk from August 1 of this year, but will continue to purchase raw milk from farmers in the current volume.
He also pointed out that the decline in purchase prices is inevitably linked to the decline in skimmed milk powder prices in the markets.
"On the European market, the price has fallen to 1,762 euros per ton, which, minus transport costs from Latvia – an average of 100 euros per ton – is below the intervention price of skimmed milk powder, namely 1,690 euros per ton. Currently, there are difficulties in selling skimmed milk powder even for 1,600 euros, which is almost half the price compared to a year ago. The fall in the price of skimmed milk powder is still being affected by sanctions imposed by Russia, the abolition of quotas and large stockpiles of powder throughout Europe," said Stanēvičs.
At the same time, he emphasized that Food Union farmers are in a relatively better situation, as the company raised the price several months ago and the company's average price is significantly higher than the average price in the country and only slightly behind Estonia's average raw milk price, which is historically the highest price in the Baltics.
Food Union purchases milk from 400 Latvian farms.
As reported, Sandra Stricka, the head of the association "Lauksaimnieku apvienība" (Farmers' Association), previously claimed that farms experience discriminatory policies from processors regarding the formation of milk purchase prices, and therefore face the threat of mass liquidation of herds due to unprofitable farming. Therefore, milk producers have asked Prime Minister Laimdota Straujuma (V) to defend the interests of farmers.
Stricka also said that currently the prices of milk purchased by processors from different farmers differ by as much as 19 eurocents per kilogram. Many milk producers no longer have the opportunity to purchase concentrated feed, which is why milk yields are falling and milk quality is decreasing. Dairy farmers, whose products are purchased at the lowest prices, are also losing the opportunity to prepare for the winter, which is why there is a risk that a large number of cow herds will be liquidated in Latvia.
As reported, the decline in milk purchase prices in Latvia began last fall, which was explained both by the Russian embargo on milk overproduction and by general trends in global milk markets.
Meanwhile, in the difficult situation of the dairy industry, this year you can count on more than 43 million euros in state support, of which 23.36 million euros have been allocated for breeding, 12.38 million will be support for dairy cows, and 7.7 million will be support from the European Union.