Prices are increasing for much of food products. This situation goes hand in hand with rise in production costs suffered by the livestock sector. Although, on the other hand, the prices received by the sector remain stable. A vicious circle that has caused the so-called milk crisis. Keep reading that right now we tell you more.
Losses in the dairy industry, what is the problem?
Although the livestock sector has already suffered several crises in these years, the last one is directly related to the cost increase due to the rising cost of animal feed.
The price of complete rations for cows, goats and sheep dedicated to milk production has risen in this year 2021 between 6 and 9% Over the previous year. And the complementary ones have increased between 14 and 19%.
Likewise, data from the Ministry of Agriculture, Fisheries and Food suggest that since 2013 there weren't such high prices. And they try to explain it by mentioning the notable increase on a global scale in raw materials such as corn and soybeans, the basis of animal nutrition.
Although the increase in feed prices in proportional terms is not colossal, it is relevant because spending on food accounts for more than half of the total costs of a dairy farm.
The chain law is not fulfilled
The Law of the Chain it was improved in February 2020 via Royal Decree. It prohibits one link in the chain from being able to sell to another at a price lower than its production costs.
Currently, 75% of the milk market is concentrated in the hands of five manufacturers. These are Lactalis Puleva, Capsa (Central Lechera Asturiana), Iparlat (integrated supplier of Mercadona), Calidad Pascual and the Covap cooperative.
And all of them agree that although the main precipitator is the increase in feed prices, the problem goes further. The value chain and the Law of the Chain do not work well, and therefore have to be re-checked.
In the last five years around 5.000 farms have disappeared dairy farming. A problem in which a key factor has affected: the milk can only remain in your facilities for 48 hours.
In the same way, manufacturers direct their criticism to the distribution, which is ultimately the one that sets the sale price to the public and to which They accuse of compressing the chain until reducing the margins to their minimum expression.
"With milk around the neck", campaign to end the milk crisis
An example of a protest against high production costs has been the campaign called "With the milk around the neck". In the cities of Seville and Malaga, farmers have distributed 500 liters of milk free to citizens and have collected signatures to have a fair price for cow's milk in Spain.
Some 25.500 people have already signed the petitions of dairy cattle farmers, most of them collected through the platform Change.org. Calling organizations and farmers have once again denounced the crisis suffered by dairy cattle, mainly due to the pressure of prices per liter of milk at origin that do not cover production costs.
The average cost of producing a liter of milk, according to the Ministry of Agriculture, is 0,35 euros, but in some farms it amounts to 0,4 euros. However, in the last year the industry has paid the farmer around 0,31 and 0,33 euros per liter. That is, at a minimum, they have lost about two cents per liter, while production costs have risen by 35%.
Despite the protests in front of industries and businesses in different parts of the country, the last word is the Food Information and Control Agency (AICA), in charge of ensuring compliance with the Chain Law. And you, what do you think of this situation? Do you think it will be solved in the short term?
