Price pressures cause concern in Austrian market
“While exports of dairy products got off to a good start in the first quarter of 2021 and imports fell significantly, massive increases in the cost of intermediate inputs and, above all, price pressure from retailers are now causing major concerns on the home market,” says the president of the Association of Austrian Milk Processors (VÖM), Helmut Petschar on the current situation of the dairy markets.
“The positive developments on the foreign markets must not be withheld from the domestic dairy farmers due to the effects of the highly concentrated market situation in Austria, while at the same time massive cost increases and additional costs for higher quality standards have to be dealt with,” says the VÖM president.
According to surveys by Statistics Austria, exports rose by 1.8% in the first quarter of 2021, while imports fell by 10%, which led to an improved foreign trade balance.
In the case of cheese, the most important foreign trade product, reduced import volumes with lower prices can be observed, while export volumes increased with stable prices.
There is currently positive news for the Austrians of an overall good market development on the international markets, and products with higher Austrian quality standards are in demand abroad.
The lack of sales to gastronomy and tourism has hit Austrian dairies hard, but the long closures are also likely to be responsible for the decline in imports of simple goods for gastronomy and tourism.
For Petschar, this different development is a clear signal that the milk market is suffering from a structural imbalance.
“It cannot be that additional expenses for higher quality and cost increases at home are not compensated, so the honest quality efforts of the Austrian dairy farmers and dairy industry do not find the appropriate compensation due to the market conditions, although these higher, domestic quality standards and a secure self-sufficiency everywhere – both demanded by our consumers – are ignored by retailers as well as by political decision-makers,” he says.