Baltic Export, Estonia, Foodstuff, Lithuania, Markets and Companies

A dozen milk tankers are dispatched to Lithuania every day, each containing approximately 23 tonnes of milk.

Farmers note that besides the better prices, the contract terms and payment stability provided by Lithuanian suppliers are also better and most milk producers have concluded contracts with Lithuanian dairy industries for a year.

Aavo Mölder, board member of Laeva Piim and head of the Chamber of Agriculture and Commerce said that last year, Estonian dairy industries implemented a quota for dairy farms, saying that they would accept just 60% of production. Then industries bought milk from Estonia to take in to Lithuania and Latvia. “I think that export of raw milk is not a monopoly of processing companies, producers can do it too,” said Mölder. While in an average Estonian dairy cattle there are 80 cows, in Latvia there are 7 and in Lithuania 2. Thus the shortage of milk.

There are a lot of industries in Estonia and they can dictate the price to producers. Last year, they paid dairy farms an average of 1.6 kroons less a litre than in 2008. Mölder said that farmers paid 6-7 mln kroons extra to produce milk a year which isn’t sustainable.

Thus at the end of the year they started looking for exporting raw milk. Since now Estonian dairy industries also had a shortage of milk, they raised prices in January. Now there is no big difference anymore: in Latvia-Lithuania litre costs 4.15, in Estonia 4 kroons. If the farms hadn’t launched export, in Estonia the price would have been 2-2.30 kroons a litre, Mölder thinks.

In order to a farmer to make investments too, the milk purchase price should be at least 4.50, said Mölder.