2023-05-23 20:12:25
Albert Nogué has a small farm in Muntanyola (Osona) and, since the beginning of the year, he has already had to sacrifice six cows to be able to move forward. “We survive as best we can, culling the less productive animals and juggling,” he says with resignation as he explains that he closes the months “as best he can.” In fact, the census of dairy cows in Catalonia has dropped by 1.6% since the beginning of the year. The reason is the low price paid by the industry per liter of milk, which is now around 55 cents. For the business to be viable, however, there should be at least 60. In 2022 the industry paid them some months above the price, but this 2023 they have already announced reductions of between 10 and 12%.
Catalan farmers have been complaining for years that the industry pays them a very low price for the milk their cows produce. Paying below cost calls into question the viability of many farms, and there are some that could not do it anymore and ended up closing. In fact, in the last 25 years 90% have lowered the blind, and the trend does not seem to be stopping. For now, there are about 380 left in all of Catalonia.
In 2022, for a few months, many farms experienced a kind of mirage and the price they received per liter of milk was slightly higher than it cost them to produce it. But with rising energy costs and a lack of fodder as a result of the drought, this margin has been shrinking. This added to the announcements of the industries a few days ago to reduce between 10 and 12% what they are paid, again places small farms in a position of vulnerability.
55 cents per litre
Albert Nogué is a young farmer from Muntanyola who manages a farm of 50 cows. He explains that they are now selling the milk at 55 cents a litre, when the costs are a couple of cents above. For him, the problem is the “pyramidal” shape of the sector. “There are few distributors who capture a large part of the market and try to sell the milk as a promotional product at a very low price. Then there is the industry, which does the same, and they try to pass the losses on to us, the producers”, he laments. “If the price is not fixed already, with the lack of fodder and the drought, this will only make it worse“, add.
EThe slaughter of cows is currently one of the few ways many producers have, because the price they pay for meat is high. But this has an impact on the census of dairy cows, which so far this year has already dropped by 1.6%, according to sector data. In breeding animals it has dropped by 4%. Therefore, there are fewer and fewer cows on farms and it must be taken into account that it can take two years for an animal to become productive again.
Selling dairy cows for their meat, however, is only a short-term solution. “You think about it a lot, because in the end it solves a problem for you today, but in a year or two you’ll miss them”, says Francesc Solà, cattle farmer from Malla (Osona) with around 250 head. “The dilemma now is whether you buy food or slaughter cows,” he explains. “Because then you don’t have production, and it’s not easy to fill the barn with animals again,” he adds. In his case, this 2023 he had to sacrifice 5% of the animals. “A month ago I was thinking of taking out many more, but it has also rained and that gives us hope,” he explains.
VAT unpaid
To further understand the problems of farms like yours, you must take into account the fact that the State has not yet paid them VAT on the milk they sell. “All we needed was for the Spanish government to remove the VAT from the final consumer of products such as milk or eggs, because the farmers are bearing it,” he complains. “Since they removed the VAT in January, the State has not returned it to us, however instead we pay it when we buy fodder or diesel“, points out.
Last May 3, the Union of Farmers and the Union of Unions of Farmers and Ranchers, at state level, denounced to the National Markets and Competition Commission (CNMC) three distributors for setting identical prices in the sale of the carton of white brand UHT cow’s milk, at least, for four years. These are Mercadona, Bonpreu and Lidl, chains that at the time of the complaint already denied having agreed on prices. The abuse of power reported by the farmers could not only infringe the law of competition, but also that of the food chain.
In this line, Abel Peraire, cattle farmer and member of the union, criticizes that the situation affects “directly” on the producer. “The industry is tight, though the producer, who is the weakest step in the chain, is the one who always receives the christening“, he laments. They saw the passage of the food chain law as a tool to fight against the power position of the distributors and the industry, “but it is not being followed.” “To begin with, the milk offers as a product they should be banned, this is hurting us a lot,” he regrets.
Catalonia has a deficit in milk and 50% is imported. In this context, Peraire points out that the slaughter of cows is a “nonsense”, precisely because there is a lack of milk. But on the other hand, since the meat is well paid and there is little fodder due to the drought, “an animal that would have stayed in the farm another year, this year goes to the slaughterhouse”, he explains.
to survive, Peraire points out that the price they should pay for milk should be at least 60 cents. This, transferred to the linear, would mean that the final consumer would have to pay for the bric of white brand milk at a price not below 1.10 or 1.20 euros per liter.
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