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Even after the 25% price drop, cow's milk remains the most expensive in Europe

2024-04-11 07:14:00, Ekonomi CNA
Even after the 25% price drop, cow's milk remains the most expensive in
Illustrative photo

Farmers do not find a market for selling cow's milk as raw material for processing, as the asking price for purchase within a year has decreased by 25%.

Milk processing factories claim that the price of milk from the Albanian farmer, even after the price drop, continues to remain the most expensive in Europe, since the subsidies given by European countries to foreign farmers help to reduce costs.

Managers of medium-sized farms claim that they are not selling milk to processing factories because of the discrepancy with the price. For the January-March period, milk imports increased by about 33% year-on-year, according to Customs data. The amount of imported milk for January-March reached 4.6 million liters, the highest since 2016.

How much has the selling price of cow's milk been reduced?

Ervin Resuli, manager of a medium-sized farm in Fier, claims that currently milk processing factories are not buying milk produced by large and medium-sized farms, due to price conflicts. The only ones who are selling milk at the price of 60 Lek, below the cost of production, are the small farms.

Resuli said that the situation has been created after the drastic drop in the selling price, which threatens the bankruptcy of farms. According to him, from April 2023, when milk was sold at a price of 80 Lek without VAT, until now the selling price has dropped by 20 Lek per liter.

Within a year, the selling price of cow's milk for farmers has decreased by 25%, from 80 ALL without VAT, which was in April last year, it is currently being asked for 60 ALL without VAT. In the span of 1 year, the selling price of milk has been reduced several times by 2 to 3 Lek. The last decrease was marked on April 1, 2024 with another 10 Lek. The selling price of milk went from 70 ALL without VAT to 60 ALL without VAT.

The reduction in the selling price forced the livestock farmers to protest for the second time in defense of their production, demanding more subsidies from the Albanian state. This is the second protest to take place in a few months where farmers have poured their produce on the streets, with another protest being held by farmers in February.

The fall in the selling price of milk started in December 2023. Taulant Pupa, the administrator of the "Vita 2001" milk processing factory, earlier claimed for Monitor that the fall in the purchase price of milk from the processing factories in Korça started due to lack of sales.

According to him, the prices of cow's milk in December fell by 5 Lek per liter, reaching 65 Lek without VAT. According to him, even some factories are buying milk from the farmer for 50 Lek per liter without VAT.

Luis Ndreka from the company "Lufra" claims that the price of milk as a raw material has been the highest in Europe and perhaps in the world, until near the end of 2023. According to him, the price still remains high compared to European countries even with the decrease the last one on April 1, 2024, due to the subsidies given to foreign farmers, guaranteeing a reduction in costs.

According to him, the decrease in the sale price of milk, which is used as a raw material for the production of dairy products, was influenced by the reduction in the consumption of finished products.

"After the Russia-Ukraine war in 2022, feed costs for keeping animals increased, which led to a reduction of heads and a decrease in the number of milk production stalls. The increase in production costs was accompanied by an increase in the selling price of milk. Throughout 2022, the price of cow's milk went from 58 ALL per liter without VAT until the end of 2022 to the level of 73-74 ALL without VAT per liter.

The increase in price stimulated a lot of interest in breeding cows and increasing herds. In 2023, there was a slight drop in the price, reaching sales values ??of 68-70 ALL per liter. But again, the rather high price, compared to European countries, encouraged the increase of the number of heads in the stables and therefore the amount of milk produced.

In these conditions, when the quantity is high, the price continues to be high, but the demand for these products on the shelves does not have a recovery at the same levels, naturally this has brought a reduction in the price of milk to 64-66 lek as we speak today ", he claims.

Imports increased by 33% for the months of January-March

According to Customs data, 4.6 million liters of milk were imported for the January-March period, the highest amount since 2016. Imports for the period compared to years have increased by about 33%.

The processors emphasize that they continue to concentrate supplies of raw materials for production to the local farmer, but according to them, compared to abroad, the prices of milk as a raw material are cheaper.

"The price of milk that comes from import farms is cheaper. Last week it hit a minimum of 38 cents at the farm gate in Hungary. Together with transport (which adds about 20% to the cost) and the 10% domestic production protection tax, it comes here to the collection points at a cost of about 59-61 Lek without VAT, again cheaper than the price offered to local farmers. The farms of the EU countries, such as Hungary or other countries, have been heavily supported by policies and subsidies and continue to be subsidized, which greatly reduces the cost of production", asserts Mr. Lunch.

According to customs data, 126.9 thousand kg of powdered milk were imported for the months of January-March. Compared to January-March 2023, the imported amount has dropped by 54%./ Monitor magazine

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