Finnish dairy farms are in dire straits due to the rapid growth of Baltic milk production and the importing of foreign cow's milk.
In spring 2015 the EU abandoned its milk market production quotas. The dairy markets have also been shaken up by the import ban imposed by Russia some years ago.
The Pellervo service organisation for Finnish cooperatives estimates that even harder times are ahead. The booming growth of dairy production in Estonia, Latvia and Lithuania is the newest serious competitor to Finland's milk industry.
Baltic development not to be trifled with
Milk production has become increasingly based on market stipulations since the eradication of the EU quotas.
"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.
Vuori urges 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.
EU production up 7% – under 1% in Finland
Last year operations ceased on 500 domestic dairy farms.
"At the same time the average size of farms has grown and cow's milk production has stayed fairly stable for now," Vuori says.
The European Commission decided on a 500-million-euro support package for dairy farms earlier this year. Finland's share of the aid is 7.5 million euros.
Strong milk production countries such as Germany, France, the Netherlands and Ireland are strengthening their foothold in European dairy markets.
