To the main topics on this year 13th Dairy Cooperatives Forum in Augustów organised by the First Communication company belonged the abolition of milk quota, crisis on the milk market and increasingly difficult cooperation with retailers The participants wondered together what dairy cooperatives can do to manage the crisis and to be competitive in the future.
The Forum took place on September, 10 – 12. The event joined more than 200 participants from 13 countries, dairy cooperatives representatives, industry organisations and the governments of 6 countries.
The topics like the management instruments applied to the market in milk in the light of the current economic and political crisis, the future of the dairy sector, transformation of polish dairy sector in the period of Polish Membership in EU, producers’ and nutrition exporters’ possibility of development, diversify problems and finding of new markets of sale were elaborated during the 13th Dairy Cooperatives Forum. That is why in this year conference took part special invited guests, inter alia, Jerzy Bogdan Plewa – Director-General in the Directorate General for Agriculture and Rural Development, Minister of Agriculture and Rural Development – Marek Sawicki, Michel Nalet from European Dairy Association (EDA), Andrzej Babuchowski – Counsellor Minister, Permanent Representation of the Republic of Poland to the European Union in Brussels, Peter Stahle from Australian Dairy Products Federation, Kirsten Holm Svendersen – Dairy Policy Director Danish Dairy Board, Damien Lacombe – President of Sodiaal Union and a dairy farmer from France, Attila Nagy from Hungarian Ministry of Agriculture, Ludwig Börger from Deutscher Bauernverband e.V., CEO of QM-Milch e.V.
The situation on milk marker is quite difficult, European dairy representatives underline, that the abolition of milk quota was a right decision and they do not want to come back to quota system. They are convinced that the persist drop of milk prices have not a relation with the quota abolition. The decline in milk prices was caused by recent event on global marker : slowdown in China and Russian embargo.
The fact that the milk prices are quite low, have no correlation with the abolition of milk quota – said Kirsten Holm Svendsen, Dairy Policy Director Danish Dairy Board – it was expected that after the abolition of milk quota the milk river will flow, but nothing like that have happened. Only in Ireland the growth of milk production is still visible. European Commission forecasts an average growth of 1%. She has added that the producers have to understand that the increase of milk production is not possible, when we do not have such demand on the market. – Danish people are happy with the abolition of milk quota – she said – We do not want to turn back to quota system. It is the market which should decide about milk production, not the politicians.
Damian Lacombe, President of Sodiaal Union and a dairy farmer has noticed that the farmer s in France can not produce as much milk as they want.
- We permit increase our production only when we have investment plans, we expand on new markets – he explain – in other situations we are very cautious and we do not want to cause our members troubles. – We are speaking a lot with our farmers. We tell them that the delivery of milk increase should come in the right moment.
Martin Homan, Counsellor for Agriculture in the Embassy of Netherland s in Poland underlined that it was expected an 20% production increase after the abolition of milk quota. However it amount only 2%.
- It is visible that a free market has already reacted – he underlined – The farmers have reduced their production because of low prices.
He added that Dutch farmers know that milk price begins to rise. The possibility for the milk production are very favourable when it comes to the future perspective. The producers have to find some ways to survive this difficult period.
Only Edmund Borawski, the President of Dairy Cooperative Mlekpol in Grajewo noticed that it was not the right moment to introduce the abolition of milk quota – it was the time when we have Russian embargo. Apart from that, this situation was created appropriate climate for retailers to decrease the prices.
The Forum devotes a great deal of attention to difficult cooperation with retailers which have increasingly stronger position. The representatives from different countries described how they domestic dairy cooperatives deal with this problem.
How the Polish dairy sector look s like compared with European? The sector is still fragmented. During the numerous statements and discussions the topic like consolidation appeared very often. It is well known that there is easier for bigger companies implement innovations, because they are more competitive.
Wherein lies the problem?
Main obstacles lied on our mental part. – said Edward Bajko, President of the Dairy Cooperative Spomlek in Radzyń Podlaski. It concern not only the Dairy Cooperative’s Management Board, but also the farmers. He added also that people keen to benefit from consolidation appear while we the economic situation is worsen. It is very difficult time for small dairy cooperative and it is difficult to stay on the market. They have only to remember that in the same period bigger dairy cooperatives tackle also with more difficult situation and they are not willing to consolidation. Taking over a small dairies and keeping an inefficient undertaking afloat is unprofitable.
Where to look for new sales market, where do we have more potential – on global or domestic market – that were the main questions asked during lively discussion on the Dairy Cooperatives Forum. Asia, Latin America, North Africa are countries in which the experts see the future market. The participants of the Forum underlined that both domestic and global market have the same priority.
We have to be competitive on regional, domestic and global market – underlined Ludwig Börger the Director of Deutscher Bauernverband e.V.
13th Dairy Cooperatives Forum in Augustów bring a closer look on European and global dairy sector, its characteristic and difficulties. There was an unanimous agreement among all participants that there sometimes appears periods of economic downturn in milk market. They appear during the quota time and government applied some support mechanisms. To tackle with these problems also in worst periods we have to implement innovations and listen to the market needs.
13th edition of Dairy Cooperatives Forum took part under auspice of the Minister of the Agriculture and Rural Development, the Minister of Economy, the Minister for Foreign Affairs, the Seym of the Republic of Poland, the Polish Chamber of Milk, the European Dairy Association and the Federal Republic of Germany Embassy, the Embassy of Netherland, New Zealand and Hungary.