The situation in Serbian dairy industry

"As you know Government of Serbia has introduced state of emergency for the whole country with a set of measures against COVID 19, and new measures are introduced on daily basis. When we talk about the consumption of dairy products, there is a noticeable drop in the purchase over the past 3 weeks. After the initial increase in sales of UHT milk and similar products with longer shelf life demand for dairy products has dropped. Factors which contributed to this fact are above all the isolation of the people and curfew for all citizens in the period 17:00 – 05:00 next day and the fact that all restaurants and hotels are closed, thus almost whole HORECA chain for dairy products is closed. Leaving home during the curfew is only possible in case of medical urgency, for people with a work permit or a special authorization issued by government authorities.

When we talk about the economy and quarantine situation the undertaken measures didn’t avoid dairy sector. It is evident that the very unique conditions on todays’ markets drive a range of dairy product prices downwards with significant impact on our economic sustainability. Supermarkets, groceries, gas stations, post offices, banks and other service providers reduced their working hours to observe the curfew, with most closing by 3 PM or earlier. Farmer’s markets have been closed or significantly reduced their working hours (only few hours, 3 days a week). All public transportation is suspended. Taxi services are limited but remain operational and driving personal vehicles is allowed. Cafes, restaurants and shopping malls are closed for public with some being operational only for takeaway’s and home food delivery. Outdoor and indoor gatherings are limited in both cases so that the distance between people must be at least two meters, and that there may not be more than one person on an area of four square meters. All sports facilities, facilities for the elderly, schools, kindergartens, and universities are closed. Spending time in all parks and public spaces intended for recreation and sport is prohibited.

Talking globally, in terms of economics, it is of the highest importance to maintain free movement of goods and to intensify communication at a time when the whole world is confronted with the problem of the COVID 19 virus. Nobody knows at this point how long this will last, thus it is too early for any forecasts. I’m strong believer that we’ll be able to pass this situation and return to normal operations in a few months.

Talking about volumes, increasing milk production in Serbia up to the seasonal peak will even sharpen the challenge for the dairy sector in terms of milk logistics (from milk collection to milk and dairy products deliveries) and milk processing. Any additional barrier will inevitably lead to a situation in which failing milk collection and shortages in milk and dairy supply cannot be excluded. It is even now that the smallest of milk processors are closing their facilities due to lack of demand. Fortunately, most of the dairies are socially responsible companies which are giving their best to maintain volume and raw milk purchase prices, and they will do so for some time at least, and as I already said, it is too early for any predictions. Cows are unaware of the COVID 19 situation, they have to be milked and milk has to be processed. Raw milk is a highly perishable product that requires processing within 48 hours. Milk collection operations must be maintained without any interruption.

In the end, we can conclude that like all other sectors, dairy sector is facing a very hard time, some short term measures with the institutional support can be stocking with long shelf life products, such as cheese, butter, UHT and milk powder, but without demand and if situation remain active for a longer period of time, these measures might won’t be enough"

Special for The DairyNews.ru