This year’s price cuts have undermined farmers’ confidence to invest at a critical moment, warns Gerhard Bley, chief executive of the Swedish dairy co-operative, in an interview with agricultural newspaper ATL.
Gerhard Bley, chief executive of northern Swedish dairy co-operative Norrmejerier, says restoring milk prices is now the company’s top priority, after a series of cuts this year have put pressure on producers’ finances.
According to ATL, Norrmejerier reduced its milk price by SEK 0.90/kg earlier this year in response to broader market pressure, following Arla’s price reductions in Sweden. For farmers with access to the special Norrland subsidies, these reduced the effective cut to SEK 0.60/kg. Prices continued to fall through spring before stabilising in May.
Bley is critical of the timing of the cuts and points to Sweden’s food VAT reduction on 1 April as a missed opportunity:
“When we had reached a historically high milk price, we would have preferred to remain at that level. Given that food VAT was reduced on 1 April, there was no reason to lower consumer prices further. Instead, farmers ended up carrying that cost through lower milk returns,” he says to ATL.
Closure and restructuring
Alongside the price pressure, Norrmejerier is pursuing an internal efficiency drive. Following the closure of its Luleå dairy, the company expects restructuring benefits to become visible during 2026. Staffing will be reduced by up to 35 employees, bringing headcount to around 400, while the use of agency labour is also being cut back.
“We are also working to reduce water and energy consumption. Today, we utilise 100% of the whey, compared with 60–70% previously, which will improve earnings,” Bley says to ATL.
The state should share the burden
Bley also raises the question of who should bear the cost of supplying dairy products to the sparsely populated inland areas of northern Sweden – a responsibility he argues should not fall on farmers alone.
“We will not stop ensuring that our products reach consumers across the north. But this comes at a cost, and it means we are taking on a regional responsibility that our dairy farmers are effectively paying for,” he says.
Bley argues that the Swedish state should help fund the infrastructure required to maintain food security and regional access.
He also calls for simpler regulation, highlighting that current Swedish environmental assessment rules for farms exceeding 400 livestock units are hampering expansion. Access to investment finance must also improve, he argues, adding that increased grant support alone is not sufficient to drive growth.
By Lene Mikkelsen Walsh – edited by Maja Løvstrup
Source: Mejeritekniskt Forum
Photo: Norrmejerier.
