EUROPE – Germany is preparing itself for serious competition from eastern European dairy processors when free trade with the accession countries begins in May next year.

This is due to the cheaper farm gate prices that exist in the eastern countries. For example, the prices in Poland, Hungary and the Czech Republic averaged 20% less than the German figure in October 2003.

The German sector is currently buoyed by a 13% increase in dairy export sales for the first seven months of the year, mainly to its western and southern neighbours, as well as a stable domestic market.

Cheese continues to be the driving force for the German industry, with production up 2.5% over the first seven months compared to the same period last year.