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Around two thirds of dairy producers and processors are planning investments in the next two to three years, with the focus on technological improvements and energy efficiency, according to a survey by Századvég Konjunktúrakutató Zrt. The analysis looked at the functioning of the dairy supply chain, the cooperation between the companies involved, and the challenges facing the sector.
The survey, which involved more than half a hundred dairy producers and processors, found that
the main challenges facing the sector are a lack of skilled labor and high operating costs, as well as inequalities in the supply chain between dairy producers, processors, and traders.
Eight out of ten companies see rising energy prices as a major problem and 60 percent say labor shortages have a significant or major impact on dairy production. These challenges make it difficult to implement the improvements needed for growth and more efficient production and processing methods.
The Holstein Friesian is the dominant breed in industrial dairy farming worldwide, and is found in more than 160 countries. Photo: Pixabay
On the positive side, two-thirds of the firms surveyed plan to make some kind of improvements in the next two to three years; while investments in infrastructure and energy efficiency are the highest priority in the production sector, technological improvements were the most cited by representatives of the processing sector.
The investments can be self-financed, but producers can use loans, in addition to public and EU subsidies.
However, asymmetric relationships in the functioning of supply chains were reported by the firms involved. Producers feel exposed to processors, while the latter feel exposed to retailers, which affect price setting.
Featured photo via Pixabay