Estonian Dairy Sector Faces Price Decline Amid Global Market Shifts

Recent trends in global milk prices are causing shifts in the Estonian dairy market, with expectations that local butter and cheese prices will soon decrease. Lithuanian butter, which has already seen a price drop, comprises 37% of all individual butter sales in Estonia, according to Kertu Kärk of Prisma Peremarket.

Valio Estonia CEO Maido Solovjov confirmed that while Lithuanian producers were quick to reduce prices, similar reductions in Estonian products are forthcoming. Currently, butter prices range from €12 to €14 per kilogram, but they are expected to fall to between €7 and €8 per kilogram starting in February.

Cheese prices have also seen a rapid decline on the global market. Solovjov noted that Estonian consumers should soon experience favorable pricing, although the duration of these low prices remains uncertain.

Ants Hannes Viira from the Estonian Chamber of Agriculture and Commerce reported a significant drop in international butter prices, with a 42% decrease on the German exchange compared to the previous year. Gouda cheese and skim milk powder have also seen substantial price reductions of 31% and 18%, respectively.

The decline in prices is attributed to increased production in major regions like New Zealand, the United States, and the European Union, surpassing current demand levels. This has led to full warehouses and falling prices, with an expected moderate boost in consumption and reduction in production to achieve market balance.

Viira expressed concerns for dairy producers facing these price drops, as the current milk price has fallen below production costs for many. He emphasized the need for support measures to help producers navigate this market crisis while maintaining the dairy herd for future potential growth.