A sharp drop in milk purchase prices has driven Lithuanian farmers close to despair, and since last autumn prices have fallen by a third, thus increasing farmers’ debts to suppliers of fuel, fertilizer and animal feed.
Some farms have already given up, while others are watching to see if they can survive until the new harvest.
A year ago, the purchase price of standard fat milk was 40 cents per liter, but now, depending on quality and quantity, it is between 12 and 30 cents. Farmers have indicated that the costs are about 32 to 35 cents per liter of milk. The scale of the collapse is staggering. According to the Lithuanian Dairy Farmers Association, about 5,000 farms left the sector last year alone. Currently, about 7,400 farms sell milk, while dairy processing companies, unable to obtain the necessary volume at home, import about 50,000 tons of milk per month from other countries – Latvia, Estonia and Poland – in order to continue working.
Arūnas Grubliauskis, the head of the farm Ginkūnai Agrofirm in the Šiauliai district, oversees a herd of about 1,000 cattle, about half of which are cows that produce 10 to 15 tons of milk per day. He speaks frankly about the situation, noting that there is no secret – it is bad. The farm receives 29 cents per liter of milk, while the costs reach 35 cents per liter of milk.
A year ago, the farm planned to expand, but now it is trying to stay afloat,
covering losses with income from the agricultural land and breeding cattle, but not everyone has such an opportunity.
Grubliauskis does not hide his indignation that milk prices in stores have not fallen, while direct sales prices have. A liter of milk in Lithuanian stores costs about 1.50 euros. He said that the profit distribution is unfair. Although Grubliauskis does not plan to give up, he admitted that he is currently pinning his hopes on improving conditions when the war in Ukraine ends and market pressure decreases. “We cannot switch off the lights and close the doors. It is equally hard for large and small farms alike. For smaller ones, perhaps it is slightly easier to simply sell a few cows and walk away,” the farmer said.
Svetlana Burbienė has 44 cows in Božėni, Telšai district, and runs the farm with her husband and son-in-law. The family has been working on the farm since 2008, and Burbienė said that she has never been this close to closing down. The farm delivers about 500 liters of milk every day, and the price of 24 cents per liter does not cover costs, which is why debts have arisen. Burbienė said that she is late paying suppliers of fuel, fertilizer and feed for a month or two, but fortunately, they are understanding and willing to wait.
There are no paid employees on her farm, the family does everything themselves, involving children in the most stressful moments. A year ago, when milk was paid at 40 cents per liter, the farm was doing well, and there was no need to delay payments or ask for support, but now it is becoming increasingly difficult to ward off thoughts of closing the farm. Several neighbors have already decided to sell their livestock, but
her family cannot simply follow suit, as they have received state support for the purchase of equipment
and there are existing obligations.
Burbienė recently returned from a visit to Poland, where she was surprised to find that several small farms still operate in every village. Meanwhile, in Lithuania, only large farms, which pose a risk, will apparently survive: “But large farms are not immune to disease. Just imagine what would happen if a herd of a thousand animals had to be destroyed. Where would the milk come from then?”
The cooperative Rešketėnai, which collects milk from about 700 farms in western Lithuania, is also feeling the pressure. Its head, Algirdas Leščiauskas, said that the last such severe crisis was about 20 years ago. The recession began last September, and there is no noticeable improvement. The cooperative currently supplies about 75 tons of milk per day to processors in Lithuania, Latvia and Poland, and in the summer, when the cows go to pasture, the volume could reach 160 tons of milk per day. Smaller suppliers who deliver uncooled milk receive 15 cents per liter, larger farms receive up to 30 cents per liter of milk, while the cooperative receives only 27 cents per liter of milk from processing companies.
Leščiauskas pointed out that belts have already been tightened to the maximum. The cooperative has been particularly hard hit by the rise in fuel prices, as more than a million kilometers are driven per year. They are currently considering whether it would be cheaper to buy fuel in Latvia. The cooperative has applied for fuel cost compensation, but has not received anything from the government. Leščiauskas estimates that
the farms will survive in the summer, because there is more milk and lower costs,
but in the fall an avalanche of farm closures will begin.
Eimantas Bičius, director of the Lithuanian Dairy Farmers Association, said the sector was in crisis and the signs had been visible for some time. He noted that there were about 14,000 farms that kept cows, but only about 7,400 sold milk. The rest either consumed what they produced on the farm themselves or simply stopped selling milk.
Bičius pointed to a structural problem – Lithuania’s dairy industry has grown so large that the milk produced locally is not enough. Milk is being imported while local farmers cannot find buyers willing to pay a reasonable price. He described the situation as very serious and there was no light at the end of the tunnel. Bičius said that the protests in Vilnius, where farmers were handing out milk to passersby for free, were organized to highlight the big difference between how much a farmer receives and how much milk costs in stores.
Read the full article in English here: https://www.lrt.lt/en/news-in-english/19/2906442/lithuania-s-dairy-farmers-are-going-under
Read also: Farmers warn Middle East conflict could drive up fertilizer and food prices