Fact: In Vimmerby, milk is turned into powder for export to Oman
Every day, around one million liters of drinking milk is produced in Sweden. During holidays and weekends when schools are closed, only 900,000 liters are needed per day.
Today there are around 3,000 dairy farms and around 300,000 dairy cows.
While the number of dairy farms is decreasing, the number of milk producing companies is decreasing and the number of dairy cows per company is increasing. In 2022, the average herd was 109 cows per company, an increase of five cows per herd since 2021.
Just over ten years ago, Arla rebuilt its facility in Vimmerby in order to increase exports to, for example, Oman and China, where milk powder from the West is often mixed into baby food.
In Oman, the powder is repackaged into consumer products which are then sold in the Middle East and Africa.
Sources: Jordbruksverket, LRF and Statistics Sweden.
The number of dairy cows in the country has halved in the last 40 years and the number of companies with dairy cows has decreased drastically over the same period, from 40,600 to 2,800.
As schools close during the summer and on weekends and the demand for drinking milk falls, the annual export of milk in the form of milk powder to emerging markets such as China and Oman becomes particularly important for dairies.
In the last 10 years, the export of milk powder and of milk and cream in other concentrated form to China has increased by 111 percent, according to figures that TT requested from the Swedish Agency for Agriculture. In the last four years, exports have also increased to, for example, Oman, which last year received around 23 percent of Sweden’s exports of these goods.
Dairy giant Arla would like to see the dairy group’s total exports of industrial goods, including milk powder, continue to grow.
“The export, which corresponds to 18 percent of Arla’s total turnover, contributes to us being able to pay as high a price as possible for Arla farmers’ milk,” writes Sandra Eriksson, press secretary at Arla Sweden, in an email reply to TT.
Lowered price
A price that, however, does not impress Claes Jonsson, who runs a dairy farm in Tibro, Västergötland and is chairman of the organization Sweden’s Dairy Farmers.
At the beginning of June, Arla lowered the price to farmers to 4.24 kroner per kilo of milk, now on Friday a new price offer will come from the dairy giant.
“Currently, at least SEK 1.60 per kilo of milk is needed to cover the high production costs,” says Claes Jonsson to TT.
New markets for exports are good, he thinks, because the dairy farmers depend on the dairies to be able to sell. However, exports will not save the shrinking number of dairy farmers in the country, according to Claes Jonsson.
Reduced number of dairy farms
The number of dairy farms has declined steadily in recent decades, from 56,000 in the 1970s to 2,700 today. Claes Jonsson predicts a continued steep decline going forward.
A cow place lasts for around 20 years, then the farmer has to rebuild it or build a new one and first get the drawing approved by the county board. Signs that several dairy farmers are throwing in the towel can now be seen in the form of a reduced number of drawings for pre-examination before rebuilding cowsheds, which are annually submitted by farmers to the county administrations.
— We have new construction of stables at record low levels. Banks today are afraid to lend money. Many farmers close down instead of rebuilding, says Claes Jonsson, who does not solely blame Arla for the problem.
The dairy farmers in Sweden compete based on a world market price, but with stricter requirements and thus higher production costs than other EU countries, he believes and gives an example.
— The grazing requirement, the law that the animals must be out grazing 2-4 months a year, we are alone in the world in Sweden.