The price of local dairy products is set to increase again next week except for plain and flavoured fresh milk.
This is to compensate for the growing expenses incurred by herdsmen, the company that produces Benna products has confirmed.
From June 20, costs across the board – from yoghurt to creams and cheeses – will rise and Malta Dairy Products is in the process of communicating a set of recommended retail price guidelines to be applied from Monday.
The new prices were not disclosed to Times of Malta.
These increases, however, would only serve to slightly mitigate the rising costs of production and compensate for losses incurred, said Noel Fenech, president of the milk producers’ cooperative, KPH Group, which brings together local dairy herdsmen and owns 70 per cent of MDP.
He said talks were being held with the government – which owns the remaining 30 per cent of the dairy company – on the way forward, adding that MDP was trying to “wait it out”. But the situation could not go on indefinitely as the company was making huge losses, despite being supported by government and EU funding.
Fenech said there was not much room for manoeuvre, apart from cutting into the already minimal profit margins of the herdsmen or putting up the prices of milk to try to make good for increases in the cost of barley, maize and soya that the animal feed was made of.
'Tonne of animal feed went up by €120'
The price of a tonne of animal feed had gone up by around €120 from around €290 to up to €410 over the last two years, he estimated. MDP had a contract with the dairy herdsmen that bound it to pay more for the raw milk if the cost of the feed rose, he explained.
The cost of cartons and plastic has also “exploded”, Fenech said about additional outlays.
The price of local dairy products had already increased sharply in January as a result of the global challenges MDP was facing due to the pandemic.
The ongoing war in Ukraine has led to a further sudden increase in prices, which are beyond its control- Malta Dairy Products
The price hikes were slapped on as local producers tried to cover costs that have been spiralling due to the global shortage of raw materials and freight expenses brought about by COVID-19.
Increases then ranged between 10c and 83c for fresh cream, yoghurt, butter and milkshakes, although the latter will not be hit again this time.
The price of basic dairy milk had remained stable back then, despite the increased costs of feed on the international markets as well as other operational, logistical and raw material expenses.
'MDP has a duty to provide nutritious dairy products'
“Despite the company’s efforts to absorb most of the additional costs during the pandemic, the ongoing war in Ukraine has led to a further sudden increase in prices, which are beyond its control,” MDP said in a statement.
“These circumstances have forced the company to increase the retail prices of some products sold under the Benna brand,” it continued.
But MDP has “a duty to ensure that its consumers are consistently provided with milk and dairy products that are not only genuine and locally produced but also nutritious on a cost-friendly basis”.
So, the price of fresh milk sold in cartons, which is a staple in the Maltese diet and part of its culture, will remain the same, it guaranteed.
MDP to continue sustaining local agricultural industry
MDP will continue to sustain the local agricultural industry to guarantee a constant supply of 100 per cent fresh milk, it said, pointing out that the price of the highest quality raw materials was increasing drastically.
“MDP has to ensure that local fresh milk, produced by Maltese and Gozitan herdsmen, reaches the homes of the consumer on a daily basis, in line with the mission statement of the company since its inception 84 years ago,” it said about its social responsibility.
It was also actively working to ensure that the local consumer was not further burdened by the “uncontrollable” price volatility.
Together with other stakeholders in the local dairy industry, it was supporting the herdsmen during these difficult times by absorbing their drastic increases, among other initiatives.
With the outbreak of the pandemic two years ago, dairy farmers were also faced with fears they would be lumped with rivers of unsold milk due to falling demand as catering establishments locked down and tourists dwindled.