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Milk price hike to save dairy farmers

Dairy company Milko will raise the price of milk next week by one krona per litre ($0.14), with all of the increase going to dairy farmers, say Milko’s chairman Per Åsling and CEO Erik Gumabon, writing in the Dagens Nyheter newspaper.

The reason for the price increase is that a falling world market price has led to a serious reduction in income for dairy farmers. Many dairy farmers have folded, and in just one year Sweden has lost the production of 8,800 dairy cows.

European dairy companies’ payments to dairy farmers have fallen around 31 percent since the end of 2007, say Milko’s management.

The price rise that Milko will institute is estimated to return dairy farmers an extra eight percent in income every month. The four largest Swedish food chains – ICA, Coop, Axfood and Bergendahls – accepted the price increase this summer, according to news agency TT.

Milko has released an opinion poll that shows that 9 out of every 10 customers are prepared to pay one krona more for a litre of milk if the price increase goes entirely to dairy farmers.

Around 850 farmers – in Dalarna, Härjedalen, Hälsingland, Jämtland, Ångermanland, Medelpad, Värmland, north Dalsland and north Västmanland – deliver their milk to Milko.

Meanwhile, wholesale milk purchaser Skånemejerier (Skåne Dairies) will pay dairy farmers 20 öre ($0.03) more for each kilogram of milk from 2010.

The additional price that Skåne Dairies will pay to farmers is being labelled a “market supplement”, and is a direct result of attempts by Skåne Dairies over recent months to increase their sales and take back market share. The market supplement will cut directly into Skåne Dairies’ profits and will not involve raising prices in shops, according to Björn Sederberg, Skåne Dairies’ CEO.

“We want to send a long-sighted signal to farmers, but it’s still not enough,” said Sederberg.

After the price rise, Skåne Dairies will pay an extra 2.79 kronor per litre to dairy farmers. “Farmers need to get an extra three kronor per litre in order to remain viable,” Sederberg added.

Around 625 dairy farmers deliver milk to Skåne Dairies.

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COW

Swedish dairy farmers in tractor blockade threat

Dairy farmers in Sweden are threatening to use their tractors to block all dairies in the country if the price of milk does not increase.

Swedish dairy farmers in tractor blockade threat

An agricultural turmoil is bubbling up in Sweden. During the last few months, there have been several reports of dairy farmers being forced to close down their farms due to the low price of milk and rising expenses.

Now, some of the farmers have had enough and are threatening to use their tractors to physically block Swedish diaries if the situation does not improve.

If the blockade becomes a reality, farmers would still milk their cows, but let the milk go to waste.

Stefan Gård, the president of lobbying organization Swedish Dairy Farmers (Svenska Mjölkbönder), explained that, at this point, the group does not back the threat to block the dairies.

“I fully understand why they are doing this. The situation is critical. You can’t leave a pot on the stove for too long before the top blows off,” he told the Local.

One of the enraged farmers is Anders Birgersson from Vikingstad, near Linköping in central Sweden.

“We need to raise the price of milk by 30 öre ($0.04) [per litre] to be able meet the market fair and square,” he told Sveriges Radio (SR).

The group hopes to bring together enough farmers for a demonstration at Jönköping, southern Sweden, to be able to put some weight into their threat to block all Swedish dairies.

On Thursday, Swedish Dairy Farmers plans to have a demonstration of its own in Stockholm.

During the demonstration the organization is going to hand over a document to Minister of Rural Affairs Eskil Erlandsson. The document will show the extent to which current laws and rules affect Swedish dairy farmers.

“At the moment, we are focusing on our own demonstration on Thursday. After that we don’t know what we will do,” Gård told The Local.

“The next step might be to join the blockade.”

Eric Johansson

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