Shaking foundations

A number of dairy products suddenly disappeared from stores recently, though there was no real shortage. Hungarian producers of milk and dairy products have been put in an unusually favourable position as a result of increased demand for milk everywhere in Europe. They have not failed to start dictating prices and if purchasers fail to accept these, all that needs to be done is to find another customer in Europe. The autumn milk war began in mid-September. Since excess supply is a thing of the past, producers of milk and dairy products are now in a position to bargain. While Hungarian milk processing businesses pay HUF 76 for a litre of milk, a price of HUF 110 can be achieved in Italy. 1.4 million litres is processed in Hungary, with another 300,000 being exported. Producers also sell another 100 million litres by direct delivery to homes. A total of 300 million litres of milk is exported. As a result, domestic supply is interrupted from time to time. We have also seen a meat battle, with breeders of swine intending to demonstrate in front of big retail chains to prevent imports of cheap foreign pork. As a result of the rise in the price of fodder, many poultry breeders are expected to be forced out of business. Using cheap imports, retail chains have been successful in keeping consumer prices down so far. If breeders were allowed to retain the VAT as a form of subsidy, already accepted in Poland for example, their problems would be solved immediately. Livestock of swine is expected to be reduced from four million at present, to three million, because prices cannot be increased further. Consumption is already down by 20 per cent, and Hungary seems to be destined to become a net importer of pork.