Latvia's Dairy Industry: An In-Depth Overview

Latvia, located in Northern Europe, boasts a robust dairy industry that is central to its agricultural sector. The industry faces challenges such as fluctuating milk prices but continues to evolve through technological advancements and governmental support.

Milk Production and Dairy Cattle

In 2023, Latvia is home to approximately 141,000 head of dairy cattle, significantly contributing to the nation's milk production of around 1.1 million tonnes annually. Cattle are the primary focus, with less documentation on dairy goats.

Milk Processing and Production of Dairy Products

Latvia processes about 950,000 tonnes of milk each year, meeting domestic demand and supporting exports. The country produces approximately 40,000 tonnes of cheese, 25,000 tonnes of milk powder, and 15,000 tonnes of whey annually, reinforcing its global dairy market presence.

Key Dairy Enterprises

• Latvijas Piens: A leading dairy processing company with a diverse product range.
• Valmieras Piens: Known for producing a wide variety of dairy goods.
• Talsu Piensaimnieks: A major dairy cooperative engaged in extensive production activities.
• AS Rīgas piena kombināts: The largest dairy-processing company in Latvia.

Dairy Farms

Latvia's dairy farms are predominantly small to medium-sized, family-run operations. Notable farms include:

• Aloja-Starkelsen: Known for expertise in dairy and general agricultural production.
• Latvian Rural Advisory and Training Centre: Provides essential support and guidance to dairy farmers.

Trade in Dairy Products

In 2023, Latvia exported approximately 180,000 tonnes of dairy products, mainly to EU markets such as Lithuania, Estonia, and Germany. The country also imported about 60,000 tonnes, primarily from EU nations and Belarus, reflecting active international trade.

Significant Events in Latvia's Dairy Industry

• June 2023 Price Increase: Raw milk prices rose, yet Latvian farmers face some of Europe's lowest prices.
• New Dairy Technologies: Investments aimed at improving production efficiency and quality.
• Government Support Initiatives: Assistance for farmers dealing with low milk prices.
• Expansion of Food Union: Broadened export markets in 2023.
• Vilvi Group Construction: Initiated a €50 million cheese production facility.
• Automation at Rīgas Piena Kombināts: Implemented significant automation to enhance efficiency.
• PAG Private Equity Acquisition: Acquired a controlling stake in Food Union Europe, indicating international investment interest.
• Updated Turkish Register: Inclusion of 15 Latvian companies to enhance international competitiveness.
• Baltic Dairy Board: Opened a new cheese production facility in Bauska with over €60 million investment.
• Bankruptcy of E-Piim: Impacted Latvian farmers owed millions for supplied milk.
• Importing Milk to Lithuania: Around 50,000 tonnes of milk imported monthly from Latvia to compensate for local shortfall.
• Vilvi Group New Cheese Factory: Opened in Bauska, expected to generate €100–120 million in annual revenue.

Latvia experienced a 4.6% decrease in milk output and reported one of the lowest organic raw milk prices, with the lowest being 37.9 cents.