Hungarian Dairy Sector Faces Crisis Amid Falling Milk Prices

The Hungarian dairy sector is currently under pressure as milk prices have sharply declined over the past five months. According to the Milk Interprofessional Organization and Product Board, both domestic and export milk prices have fallen below the average production costs, causing substantial losses for producers and processors.

As a result, many farms are operating at a loss while still facing high energy, labor, and operational costs. The organization has indicated that the current price drop is more severe than previous fluctuations, with a noticeable impact as an increasing number of dairy farms shut down.

The situation is exacerbated by the Hungarian market's dependence on European developments, where milk production continues to rise, leading to oversupply and further price pressure. Structural issues persist, with Hungary exporting large volumes of raw milk while importing processed dairy products, resulting in losses on both sides.

The strong forint has also had an adverse effect, reducing the competitiveness of Hungarian exports and making it easier for imported products to enter the domestic market, thus intensifying competition for local producers and processors.

In response, the Milk Interprofessional Organization and Product Board has submitted a package of proposals to the new Ministry for Agriculture and Food Economy. These proposals include short- and medium-term measures aimed at addressing the crisis, which affects the entire dairy value chain, from farmers to retailers.

The organization emphasized the urgency of supporting dairy farmers, whose situation has deteriorated significantly over the past six months, as part of a broader strategy to stabilize and strengthen the sector.