Milk production sector encounters difficulties

The milk production sector faces difficulties as the purchase prices are lower and the processors collect lower volumes of milk, Info-Prim Neo has learnt from the website of the Ministry of Agriculture and Food Industry. During 2004 – 2008, the number of dairy cows fell by about 90,000, mainly in 2007, when there were culled about 40,000 cows. At the end of 2008, the livestock was 180,000, as against 168,000 at yearend 2007. Milk production fell insignificantly, remaining at the level of about 600,000 tonnes a year, as the productivity of cows was raised to 2,900 kg a cow. But the modification of the rules on the domestic milk market following the liberalization of the imports of dairy products significantly affected both the primary producers and the processors. The large imports of dairy products, especially pressed cheese, butter and dry milk, are a serious blow for the milk producers and processors which saw their sales decrease and had to stop collecting milk. At the same time, in accordance with the decisions made by the Council on Product in July 2008 and October 2008 most of the processing companies maintained the purchase prices of milk at the recommended levels of 3.0 – 3.2 lei/kg and, respectively, 2.80 lei/kg. These acts improved the situation in the milk production sector to a certain extent, but affected the activity of the processing units. The stores of butter, dry milk and pressed cheese on November 27, 2008 totaled 101.3 million lei, while the debts for the collected milk – about 14 million lei. The sales during November 2008 – May 2009 slowed down, decreasing by about 39 million lei over six months. The debts to the suppliers rose by about 5 million lei to 18.9 million lei. The purchase prices of milk during the first four months of this year dropped by about 19%. The Ministry forecasts that the prices in May will be by 50% lower compared with the previous season. As a result, a large number of dairy cows could be culled and this can have a fatal effect on the milk production sector. The Council on Product considers that in order to stop the decline in the sector and stimulate its development there should be taken a number of measures, including: to subsidize milk production, terminate the delivery contracts with intermediary suppliers and purchase the products directly from producers, review the assortment of pressed cheese and produce new types of fresh and brined cheese, combat the illicit imports of dairy products, etc.