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Milk production drops 40 percent due to low demand

The Slovak milk and dairy industry has had to face the reality that a government with no cash cannot support the free flow of milk any more.
The Velvet Revolution in 1989 brought a rapid decline in the production and consumption of milk and dairy products, caused by a dramatic rise in prices. This drop in consumption is alarming since people aren't getting the neccessary yearly amount of dairy products according to the Ministry of Health. The recommended yearly consumption of milk and dairy products per person is 220 kilograms but in 1997 it is expected to be just 161.2 kilograms per person (see chart 2).
If people do not start consuming more milk and dairy products there could be a serious health problem in the future. "A long-term low consumption of milk and dairy products will cause serious nourishment problems in our people's heath," said Peter Zaška, secretary of the Slovak Association of Dairy Producers.

The Slovak milk and dairy industry has had to face the reality that a government with no cash cannot support the free flow of milk any more.

The Velvet Revolution in 1989 brought a rapid decline in the production and consumption of milk and dairy products, caused by a dramatic rise in prices. This drop in consumption is alarming since people aren't getting the neccessary yearly amount of dairy products according to the Ministry of Health. The recommended yearly consumption of milk and dairy products per person is 220 kilograms but in 1997 it is expected to be just 161.2 kilograms per person (see chart 2).

If people do not start consuming more milk and dairy products there could be a serious health problem in the future. "A long-term low consumption of milk and dairy products will cause serious nourishment problems in our people's heath," said Peter Zaška, secretary of the Slovak Association of Dairy Producers.

The reason people aren't getting enough milk is because they can't afford it. Before 1989 the price for a liter of milk was 2 Sk, thanks to the support of the State which financed the production of milk. The government paid 6 to 8 Sk to the producer, so that citizens could buy milk for a very small price. Changes in 1989 and the realization that the state had no money ended this support, causing citizens to see prices of milk and dairy products jump 300 percent.

"A liter of milk was the same price as a liter of beer in 1991 (now it's half)," said Ján Kresák, assistant general director at the Liptovská mliekáreň (a dairy producer in Liptovsky Mikuláň). "A kilogram of cheese was the same price as a kilogram of meat. That is common in Western Europe, but our citizens were not able to afford these products."

Because of low consumption and no more government subsidies, some producers decreased the number of cows, causing an even greater decline in production. The Slovak milk industry is dominated by regional milk processing plants set up around populated centers like Bratislava, Košice, and Banská Bystrica. They were not affected that much by the drop compared to smaller regional producers.

Some of these smaller milk producers have to make less milk during winter because they cannot sustain feeding cows properly for optimum milk weaning. "In Liptovsky Mikuláš," explained Kresák, "our summer production is 2.4 times higher than in winter. In winter we have to bring milk from western Slovakia, and that causes prices to go higher."

Another reason for higher prices is the way milk is packaged now. Milk used to be packaged in old, often smelly plastic bags, which were not very hygienic, but cheap. "It is becoming unacceptable to sell milk in plastic bags," said Kresák. "Milk has to be packaged in paper boxes now. One box though, costs 3 Sk." Calculating the price for production, packaging, and the cut that distributors and shops get, and the price of one liter of milk leaps up to 15 - 20 Sk. These prices are not easy for people to swallow.

Due to the low consumption in the country, producers are looking for new markets, and new ways to attract customers. Slovak milk, and dairy have found that Europe does not need new sources of milk having enough of its own resources. "It is very hard, almost impossible to export milk or dairy products to Western countries," said Ing. František Hladky, general director of Senická mliekáreň (a dairy producer in Senica). "The European market is over-flooded with milk, when the rest of the world is starving. It is not possible for us, because our production is not that big, to export to these countries."

Russia is not considered a good partner because it is very hard for small dairy producers to get paid for their products. "There are new markets in Russia, but it is very hard to force them to pay for the goods," said Hladky.

One way milk producers are looking to promote milk is to renew offering schools milk for students during breaks in classes. This worked before 1989 with the government's support. Today the stumbling block is financing the idea. "The idea is great," said Hladky. "The biggest problem we have now, and what is keeping us from doing it is: Who is going to pay for it?"

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