January 17, 2011

Estonia's milk prices increase by 5%


The buying price of raw milk has gone up a bit at around 5% at the beginning of the New Year compared with the final months of 2010, said the managers of Estonian dairies.
Manager of the Maag Piimatoostus dairy Valdis Noppel said that Maag is paying almost 5% more for raw milk in January than in November. He said he could not answer the question about the current average price in Estonia as Maag has regularly purchased milk at average prices above the statistical average.

Noppel named the current situation on the raw milk market and dairies' wish to keep their good partners as the reasons for the price rise.

CEO of Valio Eesti Kari Finska said prices were climbing from December till January. "Statistics for whole Estonia aren't ready yet, but in my opinion the rise was a little short of 5%," he said.

As to the main reasons for the rise, Finska said the demand for raw milk still outstrips supply which has a direct impact on the price of raw milk.

Asked when the rise in the purchase price of milk will be reflected in dairies' and retail prices, Noppel said that unfortunately there hasn't been a logical connection between the purchase price of milk and the prices at which dairies sell their output for some time already. "This depends in the end on retail chains' contract terms and the behaviour of competitors. It's even less appropriate to associate dairies one-to-one with stores' shelf prices," he said.

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