Czech Republic facing milk crisis

České mléko

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ZDROJ: Hrouda Jan/Euro

In recent weeks, supplies of unsold dairy products have begun to accumulate across the EU, including in the Czech Republic. At fault is last year’s overproduction of milk, as well as the ban introduced last August by Russia on numerous food item imports from the EU.

Milk producers and farmers are paying the price. Prices of dairy products have collapsed to near cost of production, and farmers have been hit by the spiralling purchasing price of raw milk. From last year’s CZK 10 per litre, the price has now fallen to the current seven crowns. Producers have been pleading for the state to intervene, and responsive moves are now under preparation at the Administration of State Material Reserves [SSHR].

“All dairy farms are drowning in goods. The warehouses of [South Bohemian dairy product producer] Madeta are at historically high levels. We have never had higher supplies of consumer-ready products than now,” Milan Teplý, head of Madeta, told E15. The company processes more than 1m litres of raw milk per day – according to Teplý, at present it is over-producing by 150,000 litres.

Madeta is presently increasing production of long-lasting dried milk as a way to utilise excess milk. “But both [fresh and dried] are being sold below cost right now. This represents some CZK 17m in monthly losses for producers,” added Teplý.

“The entire sector is witnessing increased warehousing, and we are no different,” says Jiří Tvrdík, head of Mlékárna Hlinsko dairy farm, part of the Agrofert empire. “Dairy farms across the entire EU are feeling the impact. Commodity prices began to fall last summer; at the start of this year, the trend began accelerating further.”

Miroslav Toman, head of the Czech Agrarian Chamber (AK), rang alarm bells over the current situation at a recent forum held in Žofín Palace: “If ministry-level measures are not forthcoming, then within three months we could see some very serious consequences.” Specific measures demanded by milk producers include increased purchasing of milk products into state reserves, or an increase in the intervention price at which milk is obliged to be purchased by emergency agencies.

But the Ministry of Agriculture says it has no plans at present to intervene. “The situation in the Czech dairy sector is serious, but I am not prepared to say that it is dramatic or critical,” Minister Marian Jurečka (KDU-ČSL) said at the aforementioned forum.