Dairy prices to rise, despite record farm profits

The new dairy product pricing could leave a hole in your pocket, if not in the cheese Keystone

Butter, cheese and other dairy products are set to rise in price from May 1, despite the release of government figures earlier this week showing that farms enjoyed a 20 per cent increase in profits last year.

Swiss milk producers said on Wednesday that a cut in agricultural subsidies meant consumers would have to pay more for their staples. The price of butter is expected to increase by 80 centimes a kilogramme, while Emmental cheese will go up by 60 centimes and Gruyère by 130 centimes.

The head of the Swiss milk producer’s federation, Samuel Lüthi, said the increases were necessary, even though they could have negative market consequences. He said demand for butter was expected to fall by six per cent.

Lüthi announced the price increases at the same time as reporting record milk production of 3.2 million tonnes last year. Cheese production in 2000 reached 146,000 tonnes, 20,000 tonnes more than in 1990.

He said Swiss farmers had been able to capitalise on the BSE crisis sweeping Europe thanks to the increased demand for good quality, natural products.

According to the agriculture ministry, the average farm income reached SFr66,200 in 2000, despite the collapse of the meat industry last autumn following the second BSE crisis. These results, based on a survey of 1,000 farms, are explained by good sales results for fruits and potatoes.

But the Swiss Farmers Union disputes those figures, saying the data collected gives too much importance to last year’s good plant production. By its own estimates, revenues increased by a more modest 10 per cent.

swissinfo with agencies