Finland's butter mountain of the 1980s has been replaced by shortage of milk

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With the increase of production costs, Finland now produces less milk than ever before since the 1940s. Thanks to globalisation, Finland's butter mountains of the 1980s have turned into a shortage of milk. As cheese manufacturers switch to producing milk powder for the growing markets such as China, the so-called low-cost cheeses have all but disappeared from the shelves of Finnish grocery stores.
     
"There is a grave shortage of milk", says Toni Kero, as he and colleague Tuomas Jämsä lift 40-kilogram cheese bars on a conveyor belt at Valio's cheese dairy in Toholampi.
      The dairy has had to cut back its production from 24 tons to around 16 tons per day.
      From Toholampi the heavy cheese bars are shipped to Vantaa and Belgium, where they will be chopped and wrapped into consumer packages.
     
"Who would have believed this a year ago? There is a shortage of milk in Finland, Europe, and the whole world", says Marko Puhto, director of the Toholampi dairy.
      According to Puhto, the dairy industry has customarily been considered a stable one, but now the effects of globalisation are felt even in Toholampi. Finland's butter mountains of the 1980s have morphed into an actual shortage of milk.
      "I remember the time when the dairy's parking lot was filled with milk powder stored under tarpaulins. Now it would all go, if only we had milk to produce it", Puhto says.
     
The economic growth of the Asian countries has brought new consumers to the food supplies and milk market, explains Veijo Meriläinen, Senior Vice President of International Sales at Valio, Finland's leading dairy product manufacturer.
      China, for one, has significantly increased its purchasing of milk powder, which has caused the product's world market price to double in a short time. The powder is used, for example, to make ice cream but it is also converted back to milk.
     
Many European bulk cheese manufacturers have therefore switched to producing milk powder instead.
      Consequently the so-called low-cost cheeses have nearly disappeared from the shelves of Finnish grocery stores.
     
The milk shortage has been further aggravated by exceptional natural conditions, such as droughts in Central Europe, Australia, and New Zealand.
      The converting of fields into bio energy production especially in Germany and North America has also hit milk production.
      Finland's milk production declined by over two per cent last year. "This winter's fall has been in the region of five per cent and in Southern Finland up to seven per cent. February should be prime milk production time in the cowsheds, but that does not show in the dairies", says a bewildered Puhto.
     
Finland now produces less milk than ever before since the 1940s.
      "I'm guessing in five years' time we will be head-hunting suitable milk producers"; Meriläinen predicts.
      "Rises in the price of fodder, oil, electricity, and veterinarian services drive many producers to quit", says managing director Jarmo Oksman of the Pori-based Satamaito dairy. There is pressure to increase both producer and consumer prices. Oksman predicts that a litre of milk may soon cost a euro.
      Grocery stores will not run out of milk, but the milk shortage may cause cheese dairies to shut down.


Previously in HS International Edition:
  Finland´s Ingman sells dairies to Swedish-Danish giant Arla (9.11.2006)
  Finnish dairy industry threatened by cheap imports from new EU countries (16.3.2005)

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