The head of the Lithuanian dairy union, Pieno centras, Egidijus Simonis, said that in the first half of 2022, Lithuanian dairy plants sent 27.7% less products to non-EU countries than they did in the same time period the year before. He said that Lithuanian dairy plants are some of the most modern in Europe, but that the lack of energy has hurt the country more than other European countries.
“Because our dairy industry has to pay a lot more for energy than those in other countries, it’s hard for them to compete on export markets,” said Simonis.
Lithuanian dairy farms use about 160,000 MWh of electricity each year. They paid €13 million in energy bills last year. This number is expected to be €50 million in 2022.
Lithuania sends its dairy products to Germany, Poland, Latvia, Italy, the Netherlands, and Estonia, all of which are in the EU. Most of these countries use government programmes to help boost dairy production. The Lithuanian Food Industry Association has also asked the government to help businesses with the rising cost of electricity, but no state aid has been given so far.
Latvia dairy
Dairy producers are also counting on state aid in Latvia, which is close by. Janis olks, the head of the Union of Latvian Dairy Workers, said that the financial situation of several large dairy plants in Latvia is now “dire.”
Early in October, the Elpa dairy plant went bankrupt, and the Limbau siers plant said it would have to cut back on its business.
“It’s still too early to say that other companies will follow Elpa and Limbau siers,” Sholks said. “But the fact that some market players are already bankrupt is a bad sign in and of itself.”
People warned that most dairy plants in Latvia are “on the edge of their financial capabilities” right now. No one knows what production Latvian dairy plants will make or how much they will make in the coming months. People say that the price of energy is the main unknown in this equation.
“The demand for all kinds of products is going down, and based on the most recent information, there are a number of products that we no longer make.” People said, “The stores aren’t ready to take them because no one wants them.” The number of customers in the country has gone up a little bit because of the Russian invasion of Ukraine and the influx of refugees, but their average purchasing power is much lower than it was a year ago.
