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“Anxious Anticipation” in Dairy Market

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There is an increase in energy prices – both for conventional fuel and for electricity and gas. Therefore, it should not be surprising that prices for finished products have also increased – on average by about 30% since the beginning of the year in all categories.

Forum Mleczarskie asked the Chairman of the Association of Polish Dairy Processors, Marcin Gidzik, to comment on the current cost of dairy production. Thus, the price of raw materials for production is not the only thing that kept Polish milk processors awake at night, as there was an increase in prices for all consumables, infagro reports.

Inflationary pressure

“Last year, cardboard packaging has already risen in price by more than 50%, by 170% – pallets used for transportation, by 60% – packaging foil. Inflationary pressure has also led to higher wage expectations of employees. In addition, there is an increase in energy prices – both for conventional fuel, electricity and gas.

Therefore, it should not be surprising that prices for finished goods have also increased – on average by about 30% since the beginning of the year in all categories.

Anxious anticipation

If I had to describe the mood in our industry, I would describe it with the term “anxious anticipation”. Let me remind you that in the first quarter dairies started receiving letters from electricity and gas suppliers about possible supply restrictions. As an industry, we took a firm position and demanded that dairies be exempted from these restrictions for the sake of the country’s food security,” – the expert stressed.

It is regrettable to state that the authorities, except for resonant reports in the media, have done nothing to resolve this issue, Gidzyk explained.

Availability of energy and gas, not only the prices

“In addition, in recent days we have received messages about the position of the government, we can only hope that the worst scenarios related not only to prices, but also to the availability of energy and gas will not come true. However, it is worth recalling that in August 2022, nitrogen fertilizer plants stopped production, and this led to a halt in refrigerant production. Fortunately, this time, when we informed the government about the consequences of the lack of supply of this raw material, refrigerant production was resumed within a few days,” he said.

It should be recalled that the government gave priority to dairy processing enterprises when determining the groups with priority electricity supply.

In the second half of October, purchase prices for milk from industrial farms continued an upward trend. The price was supported by demand from processors, in particular cheese makers, and a seasonal decline in milk production. Milk prices are also expected to rise in the future.

The main production processes of dairy producers and processors were disrupted due to the power outages caused by the shelling and scheduled power cuts to save electricity. This can lead to a reduction in production capacity and shortages of goods.

 

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