Zoltán Kulik: the milk market is turning around, but the price reduction of pork is still high

By: Trademagazin Date: 2023. 09. 07. 12:25

In recent times, the price of raw milk has hit a low point, but there is renewed hope for the dairy market. According to Kulik Zoltán, CEO of Vitafort Zrt., decreasing feed prices create an opportunity for dairy farming to become profitable once more. There is already an observable increase in annual milk prices, with producers noticing a 3-5 forint per liter shift this month.

Kulik Zoltán suggests that the price of raw milk has likely reached its lowest point. This positive change is already evident in the market, with milk prices starting to rise in September, partly due to exchange rate effects. He believes that the current price of approximately 150 forints per liter will not decrease further and may even experience a slight increase, averaging around 170 forints per liter annually.

Kulik Zoltán’s milk price predictions are supported by his experiences in Romania. In recent weeks, Romania has witnessed significant price hikes of 10-15 forints equivalent, signaling that the Hungarian milk market may follow suit. This means that the current price of around 150 forints per liter is expected to remain stable, or even experience a slight increase, averaging around 170 forints per liter annually.

It’s important to note the volatility of milk prices. In January 2022, milk prices were as low as 100-110 forints per liter, but they soared to 235-240 forints per liter during the early part of this year, with spot prices reaching 270 forints. The question, however, remains the profitability of production, which currently isn’t favorable for dairy farmers. The use of expensive feed, determined by high grain prices, contributes to this. Nevertheless, the introduction of new, cheaper grain varieties, silage, and hay into production should reduce costs, allowing dairy farms to generate income again.

Furthermore, the new grain varieties offer improved nutritional value compared to previous options. This bodes well for more profitable dairy farming in Hungary.

In the poultry sector, feed prices have decreased due to the normalization of prices, although there has been a decrease in consumption, albeit less pronounced than in the pork sector.

Low grain prices have led to discussions about whether it’s more advantageous to sell grain as feed, especially as barley is currently priced at an exceptionally low 45,000 forints per ton, while there’s minimal demand for feed wheat even at 60,000 forints. High-quality food-grade wheat is the only grain with acceptable demand at the moment, but mills are purchasing it in small quantities, avoiding substantial storage.