September 12, 2007

Soaring prices plunge Spanish milk sector in turmoil

The continuous rise of cereal prices have jacked up prices of milk and other agricultural products in Spain.

The Federation of Dairy Industries (FENIL) said price for producers of cow's milk went from an average price in spring of 0.30 euros a litre to 0.44 to date, an increase that could raise sales to consumers to about a euro per unit.

Livestock sectors affected by cereal and forage price rise are also pushing up milk costs.

Sheep¡§®s milk has also gone up 0.20 euros and the rise will affect its derivatives, mainly cheese.

Those who defend the production of bio-fuels insist that the scarcity of milk is not related rather, a mistaken policy by Brussels and the dairy industry, including that of Spain.

Nevertheless, Spanish cereal producers say the use of increasing land for the production of ethanol and bio-diesel has a strong effect on prices.