Government Look To Secure Milk Supply

CZECH REPUBLIC – With an eye on future quota abolishment, the Czech government announced is it keen to work closely with dairy farmers in order to reduce the risk of future milk shortages at an Agricultural Association committee meeting last week.
calendar icon 6 March 2013
clock icon 1 minute read

Milk is vital to farm incomes and some experts have posted future production decreases of 30 per cent in a post-quota Czech Republic.

Agricultural ministers are concerned that the dairy sales structure is too fragmented.

“For every dairy there is one sales organisation,” said Mr Pride. “Larger organisations will place farmers in better bargaining positions with dairies meaning higher milk prices can be achieved.”

Czech farmers market 60 per cent of milk through these sales structures, a similar market share is seen in Germany although German dairies are largely producer owned in cooperative partnerships.

The government warn that, creating larger organisations will take several years, by which point the dairy market is likely to be hit with a non-quota dairy industry.

At this point analysts expect the EU market to become pressured.

The Czech Republic is self-sufficient and is currently able to export some dairy produce to Germany. Despite good production capabilities the milk market is not being dominated by Czech producers as imported dairy products are increasing.

Further pressure is coming from low milk prices which are at 1998 levels.

This has substantial implications for agribusiness as 40 per cent of livestock revenue comes from milk sales.

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