October 23, 2007

Finland's Valio to cut production operations

Finnish dairy group Valio has announced it is cutting down production for half a working day at its Joensuu dairy in Finland for the next few weeks as milk volumes are below the normal weekly level of 1 million to 2 million litres since August 2007.

The normal yearly seasonal fluctuation is 12 percent and now has been currently reduced by 1 to 4 percent. According to Valio, the situation is caused by the increased feed prices due to global hikes in grains. Producers do not consider the use of purchased feed profitable even though it would raise milk volumes somewhat.

Ilkka Nivari, Valio's vice president for Milk Procurement and Supply Chain, emphasises that the situation will not affect domestic supply and believes the situation will improve in a few weeks' time.