Shrinkng dairy sector

According to Mikóls Istvánfalvi, vice chairman of the Dairy Product Council, a number of producers have gone of business in the last twelve months. The number of member enterprises in the Council has dropped by over 40 percent since Hungary’s accession to the EU. This is partly due to the fact that membership is no longer mandatory, as the Product Council is no longer responsible for the production quota. However, the number of processing businesses has increased by 15 percent within a year. The quantity of milk purchased by processing enterprises was down by 14 percent in the first eight months of 2008, compared to the same period in 2007. The biggest problem for producers is the HUF 20 drop in average price within the EU market since January. Hungarian milk processing enterprises pay a lower price for milk than the average price in the EU-25 market. Sales of Hungarian dairy products in the first eight months of 2008 were down by 6 percent compared to 2007, which had not been a good year either. The biggest (12 percent) drop in quantity was recorded in consumer sales of milk. The overall drop in consumption is equal in quantity to 40 million kilos of milk. The volume of cheap imports is a major problem for the Hungarian dairy sector. As usually surplus production from supplier countries is dumped in the Hungarian market, these products are sometimes sold at 30-40 percent lower prices than in their countries of origin. The Milk Product Council is to continue its collective marketing activities this year as well, with support from the Agricultural Marketing Centre. A nation-wide campaign to promote Hungarian dairy products under the slogan “MILK, present in every good thing” was launched on 1. October.