Agriculture, Baltic, Competition, EU – Baltic States, Markets and Companies

The European Union (EU) abolished milk quotas In 2015, and Russia's ban on EU food imports has also had a strong impact on the market.

The Pellervo service organization for Finnish cooperatives does not expect the situation to improve in the near future. The booming growth of dairy production in Estonia, Latvia and Lithuania is the newest serious competitor to Finland's milk industry, the organization predicts.

"It was to be expected that the large milk production countries would up their production, but political discussion has completely forgotten the rapid growth in the Baltics," Pellervo economist Lauri Vuori says.

He has urged decision-makers not to downplay the Baltic influence largely because milk production is an extremely essential factor in Finland's agricultural output compared with many other European competitors.

"We have an overproduction problem and producer prices are low, and on top of that the Baltics are pushing milk into the markets at an accelerating rate," Vuori says.

Last year operations ceased on 500 domestic dairy farms, although the average size of farms increased and cow's milk production was stable as well.

The European Commission recently approved a EUR 500 mln support package for dairy farms. Finland's share of the aid is EUR 7.5 mln.