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Hungarian dairy sector faces crisis as prices plunge

Hungary's dairy sector faces a serious crisis because of the EU's dairy market reform and a fall in demand, which have caused prices to plunge, Agriculture Ministry state secretary András Mahr said at a conference to mark World Milk Day on Wednesday.

Hungary has pressed for a 50% increase in direct subsidies for the dairy industry as a matter of crisis management, Mahr said.

The farm ministry is making an effort to do what it can to ease the plight of industry players, but it cannot use budget resources to do so, he said.

Hungarians buy just 1.2-1.3 billion liters of milk a year, well under the country's 2 billion-liter quota set by Brussels, said László Kovács, chairman of the Dairy Products Council. Dairy farmers produced about 1.85 billion liters of milk last year, he added.

Farm gate prices for milk have plummeted from HUF 95-100 per liter at the beginning of 2008 to under HUF 60. It costs a farmer about HUF 70 to produce a liter of milk.

Hungarians consume about 177 liters of milk per capita each year. Imports reach 600-700 million a year, covering about 35% of consumption. Hungary exports about 400 million liters of milk per year. (MTI-ECONEWS)