November 28, 2007

Finland meat companies worry on subsidy cut

The Central Union of Agricultural Producers and Forest Owners (MTK) is worried about the possible cut on the 141 subsidy in Finland.

MTK is particularly worried on the effect of this to Finland's pork and poultry growers.

Martin Sundman, Kaupthing bank's analyst, said that ending the subsidies would raise the price of pork by US$0.59 per kilo, or by about 30 percent.

Sundman estimates weaker farms to close operations while others will raise prices upon the implementation of the cut.

The increase in meat prices would also be a hard blow to Finnish meat product companies HKScan and Atria. HKScan would suffer most as the majority of its producers are now paid with the 141 subsidy, said Sundman.

HKScan or Atria will least likely to import meat as Finnish consumers prefer domestic produce.