October 20, 2004

Poland Increases Dairy Sector On EU Accession

Poland's dairy products exports and prices rapidly rose upon Poland's EU accession on May 1. This was stimulated by its comparatively low prices, elimination of TRQs with the EU-15 as it became part of an EU-25 internal market, as well as substantial processing facility upgrades (many EU SAPARD fund and Government finance supplemented).
 
Production is expected to increase even more due to CAP program subsidy implementation, more EU/Polish Government co-financed investments, and lower feed costs due to a record grain harvest. Prices are expected to continue to rise but at a slower pace and begin to stabilize as they eventually near EU wide price levels, according to information from US Department of Agriculture.
 
Poland's dairy sector prices have dramatically risen since its EU accession on May 1, 2004. Many farmers and processors are increasing production and upgrading dairy facilities stimulated by rising profits and subsidization as a result of EU accession. The dairy sector is heavily benefiting from new profits but this is also being augmented by financial subsidizations under the new member state CAP implemented system and EU co-financed dairy processing facility funding.
 
The only less impacting, but of Polish concern, counterbalancing factor of its EU accession is that they are currently undergoing additional Russian inspections of dairy facilities to re-establish Russian authorization to export dairy products to Russia as a new EU member state.