Campina boss warns of changes

EUROPE – A senior figure in Campina’s German arm has warned that European dairy prices are set to plummet.

Milk prices throughout Europe are falling as last year’s EU oversupply continues to pile up. The surge of an extra 0.5 million tonnes of milk across Europe in April and May of this year made matters worse. According to German milk marketing and prices agency ZMP, butter intervention stocks are 127,000 tonnes and skim milk powder stocks are at 149,000 tonnes. These are the highest levels seen for 12 years.

However, in an interview with a German farming magazine, Campina GmbH general manager Norbert Reuss warned that things could still get worse.

EU expansion in 2004 will bring more milk into Europe and depress commodity prices even further. However, he added that the quota system must be retained.

Reuss claimed that liberalisation of the milk supply sector in the EU would see deliveries to processors increasing by another 10% and prices for farmers falling by up to 50%.

He said that increased concentration on the international sector offers a good answer for many processors. Campina was among the few West European processors that continued with its Eastern expansion policy in the late 1990s.

The firm is now being rewarded in Russia, with a thriving dairy in Stupino near Moscow and a 16% share of the Russian yogurt market.

Reuss added that in the long term, few processors will be able to concentrate on single national markets.