A year of change in milk production globally
In Finland, the decline in milk producer prices at the end of the year accelerated dairy farmers' switch to less expensive feeds with lower added value. In the changing market, Raisioagro launched new feeds suitable to be used with farmer's own high-quality silage. Benemilk value added feed products, however, did well in the market.
EU ceased milk production quotas in 2015
In 2015, a historic change took place in the milk sector as the country and farm specific milk quotas restricting the production were removed in the EU. Many countries had already prepared for the change, which resulted in a clear increase in EU's milk production from the previous year. Milk production also grew elsewhere in the world but the demand for dairy products did not increase at the same pace. This led to the decline in the world market prices of both butter and powdered milk.
Finnish dairy farmers continued to invest
In Finland, milk producer prices decreased as the import ban of dairy products imposed by Russia in 2014 continued. By the summer 2015, the average producer price had clearly fallen from one year ago. Producer price in Finland was, however, higher than the average price in the EU.
Although the decline in producer price has presented challenges for milk farmers and increased financial risks, especially for farms that have made investments, it has not significantly affected milk production or the structural development of farms. The number of farms decreased as expected but, with the investments, the number of cows per farm increased. It is unlikely that milk production volumes would decrease in the near future.
Structural development, investments in productivity growth, preparedness for price volatility and a high degree of dairy product processing enable the success of Finnish milk production in the growing dairy product market also in the future.
Feed market in transition
Due to the difficult situation, Finnish milk producers seek cost savings by increasing the use of their own feed mixes and by focusing on the quality of silage and grass yield levels. The variation in the silage quality was clearly seen in the needs of supplementary feeds in 2015. During the spring, energy supplements were needed whereas in the autumn protein and mineral supplements were in demand.
Raisioagro's expertise in value-added feeds and farm monitoring
More than 40 per cent of Finnish dairy cows were fed with Raisioagro's cattle feeds in 2015. Market share of Raisioagro's cattle feeds was slightly down from the previous year particularly due to increased price competition. Raisioagro's strength lies in brands that add value for dairy farmers, such as Benemilk.
During 2015, Raisioagro introduced a new digital farm monitoring programme analysing the data collected by milking robots. Using the data, Raisioagro's experts optimise the feeding to meet the needs of each farm. At the end of 2015, there were more than 50 farms in the monitoring programme.
Well-known brands valued by customers, skilled personnel, product range suitable to different feeding methods and price categories as well as services supporting sales play a key role in the development of Raisioagro's operations and in securing its future success.