Romanian Milk Market Analysis
Romanian Milk Market Analysis
Romanian Milk Market Analysis
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Silvius Stanciu
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Silvius T. STANCIU
The Bucharest University of Economic Studies, Romania
Keywords
Milk,
Production,
Processing,
Market,
Consumption
JEL Classification
M21, L11
Abstract
The paper investigates the evolution of Romanian milk market in the European market
context: primary production, milk processing, supply and demand, consumption, prices and
quality; marketing, the domestic market. Deficiencies in the dairy sector has created
conditions for import rising. Last year brought about significant increases in imports of raw
milk, decreased milk product supplied by local farmers and keeping the main positions of the
processors on the market. Domestic consumption of milk per capita remains low in
comparison with the European average. The reduction of milk quotas will be a challenge to
domestic producers. Development of associations of producers may be a viable option to
ensure the continuity of business for the Romanian farmers.
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conditions. (Rotaru and Stanciu, 2007). The milk 10). The market demand for goat/sheep milk
obtained in households present superior products represented a powerful incentive for
organoleptic qualities, generated by the breeds and producers, fact which led to an increase in the
the animal natural feeding manner. Although milk quantity of milk with over 200 thousand hl. The
chemical composition generally corresponds to the sheep breeding sector has registered a positive
rules imposed by processors, there are still major trade balance in the last few years, thus satisfying
problems linked to the high microbiological load the domestic consumption need and creating
resulted from improper milking and storage availability for export.
conditions, thus fostering the import of large By comparing the national milk production to the
quantities of raw milk. other countries form the community space,
From the 1st of January 2014 the European Romania occupies modest places in the analysed
regulations regarding farm-produced milk quality period, succeeding in outrunning only its Balkan
took effect. According to the Sanitary Veterinary neighbours (Greece, Bulgaria), or countries that
and the Food Safety National Agency NASVSA have by far more inferior agricultural areas
(2014), raw milk can be marketed directly to the (Estonia, Slovenia).
end consumer only by complying with the Milk production decrease is due to the decrease in
provisions of the sanitary veterinary legislation in the number of animals, to the migration of the
force regarding the total number of germs workforce from the rural areas, to the dissipation of
(maximum 100,000/ml.) and of somatic cells the livestock in households or small farms, to the
(400,000/mL). poor organisation of the sector, to competition and
In Romania, the breeding of sheep is traditionally the regulations imposed by the European
made in the mountains. The main breeds of sheep community. Thus, when Romania joined the EU, it
from our country are for milk, meat, wool; there was forced to cut milk production from 5 million
exist only a few farms specialised in breeding tons of milk per year to a maximum of three
sheep only for milk. million tons of milk per year. Out of this quantity,
Table 4 shows the data published by the Ministry two million tons were earmarked for direct sale,
of Agriculture and Rural Development (MARD, and one million tons for delivery to the processing
2014) regarding the cattle number and cow milk plants. Producing more milk involves penalties of
production evolution. The lack of a Romanian 278.3 euros for each extra ton of milk. The
animal breeding development strategy for each production of smaller quantities of milk involves a
breed has led, in the last five years, to an important decrease in the next few years. According to
decrease in the number of animals (-18%) and in Osman (2012), the common agricultural policy
the quantity of milk production for consumption (- affects mainly the traditional micro-farms that do
22.35%). The lowest values were recorded in the not succeed in complying with the European
crisis period (2008 - 2010), followed by a slight standards for medium and large producers. The
change for the better in the last years. Romania, production potential, targeted by the MADR
one of the greatest forces in the domain of animal leadership, is represented by the holders of 20-50
breeding, has become an importer of food products, animals, and respectively 50-100 animals, and not
although, by tradition, it is one of the countries that by the small producers.
foster ideal conditions for animal breeding. The The organisation of this sector is poor and does not
annual average milk production per cow is between answer to the European standards regardingmilk
2500 and 3600 l.This is also a weak point for quality. According to the data presented by Văduva
Romania as compared to other countries of the (2014) in the journal Recolta.eu, in 2013, the
world. Therefore, according to the FAO data, number of authorised/registered farms, which
quoted by Vidu (2002), the first place in the world deliver raw cow milk to be processed, is of 2,044,
as far as milk production per cow is concerned is the great majority being in compliance with the
occupied by Israel, with 8444 kg.of milk/cow, requests of Section IX from the European Statute
followed by the USA with 7690 kg. of milk/cow, 853/2004.
Japan with 6552 kg. of milk/cow and Canada with Out of the total of milk delivered to processing
6225 kg. of milk/cow. plants, 2.2% do not comply with the criteria
In the analysed period, the sheep and goat breeding imposed for raw milk in Section IX from the
sector recorded a genuine revival, especially in the European Statute 853/2004.
total number of animals. Live meat production
constituted one of the main animal products The milk needed for processing
exported by Romania. Between 2008 and 2013, the The milk quota allotted to Romania for processing
number of sheep increased from 8882 to was of 1.2 million tons in 2013, out of which
9136thousands. The number of goats increased domestic production being of 880,000 tons, the
with almost 50%, from 898 to 1313 thousands, the deficit of 320,000 tons being covered from imports.
goat and sheep sector being the only one which Over 60% of the milk processors are in
seems not to be affected by the 2010 crisis (table
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Transylvania, an area which is well-known as a big veterinary registration documents, issued by the
”milk pool” in Romania. county’s DSVSA, according to the provisions of
The daily milk need of processors is of over 2,410 the NASVSA Ordinance No. 111/2008. The milk
tons, out of which almost 137 tons of raw milk is and cheese obtained by farmers must be safe for the
imported, according to SPOT, whereas 2,273 tons consumers ‘health. The official veterinarians that
of raw milk are produced in Romania. ensure the supervision of food markets will check
The newest price weighted average of the raw milk the manner in which are obeyed the sanitary
produced in Romania is 1.51 lei, while our veterinary conditions regarding milk and cheese
neighbours sell milk at 0.35 eurocents. In transport, storage and marketing.
December, the SPOT milk price was of 0.52 Raw milk direct sales towards the end consumer by
eurocents. means of vending machines are regulated by
Romania is importing more and more milk. NASVSA’s Ordinance No. 55/2010, which states
According to the NIS data, in 2013, the quantity of the sanitary veterinary conditions in which raw
cow milk collected at the processing plants milk direct sale can be done by means of vending
decreased with 8784 tons (-1%) as compared to machines.
2012. In the same period, the quantity of imported Table 11 presents the situation of the sanitary
raw milk increased with over 62%, from 59267 veterinary authorised and verified units by
tons in 2012 to 96240 tons in 2013. NASVSA at the beginning of 2014. The legislature
Romanian exports are few, being done mainly by stipulates that if upon reception there will be found
the large processors (Danone, Friesland) that are some non-compliant milk; the milk processing
looking for new markets in Central and Eastern plants have the possibility to process it into cheese,
Europe. Table 5 and table10 presents the situation with a maturation period of at least 60 days, in
of domestic milk and dairy product exports. accordance with the European legislation.
Romania mainly exports cheese and concentrated
dairy products that have a high value and a high Conclusions
degree of processing as compared to the other The Romanian territory has a significant natural
products. potential, represented by large areas of pastures and
hay land, qualified personnel and animal breeds
New rules regarding milk and dairy product adapted to the natural conditions from Romania.
production and marketing in Romania The Romanian raw milk production sector is
From the 1st of January 2014, as a consequence of fragmented, being mainly made up of producers
the end of the transition period granted to Romania owning small farms, in which there are only 1-3
in order to improve raw milk quality, Romanian milk cows. Sheep and goat breeding represents a
producers must meet the quality conditions slight increase, but this increase can be affected by
imposed by the European standards. According to the critical incidents from the market. (ESP,
NASVSA’s decision (2014), the small producers Bluetongue) – table 3. The negotiations that took
(the households) or milk cow farms can deliverthe place before Romania joined the European Union
raw milk to the milk collection centres or directly disfavoured the Romanian milk sector, the imposed
to the milk processing plants. In order to market the quotas not being correlated with the indigenous
raw milk towards the end consumer, there will be production potential. The support of the
some supplementary regulations, as compared to government is mainly declarative, without the
2013 that must be obeyed. Therefore, there will be implementation of some concrete measures, which
obeyed the provisions of the sanitary veterinary could support Romanian producers. The lack of
legislation in force regarding mainly the reaction of the Romanian officials and the poor
microbiological load – the total number of germs competition that exists among Romanian farmers
(max. 100,000/ml.) and the somatic cells will lead to an ever higher dependence on imports.
(400,000/ml.), The raw milk meant for direct sale
to the end consumer, or its processing into cheese, Acknowledgments
must come only from healthy animals, which do This paper was co-financed from the European
not suffer from diseases that can be transmitted to Social Fund through Sectorial Operational
people by drinking the animal’s milk. The Programme Human Resources Development 2007-
producers who sell raw milk directly to the end 2013, project POSDRU number /159/1.5/S/138907
consumer in markets must have health cards that "Excellence in scientific interdisciplinary research,
must state the good health condition of the animal doctoral and postdoctoral school, in the economic,
from which the milk comes, filled in by social and medical fields-EXCELIS", coordinator
veterinarians from the original villages, and a The Bucharest University of Economic Studies
report that must certify the product’s compliance
with the requests of the legislation. Milk and
cheese marketing by farmers in food markets and
in fairs is done only on the basis of the sanitary
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Appendix
Table no 1.
Surfaces occupied by pastures in Romania 2008 – 2013 (ha)
2008 2009 2010 2011 2012 2013
Pastures 3333028 3313785 3288725 3279251 3270610 3273961
Hay fields 1532342 1528046 1529561 1554680 1544957 1541854
Total 4865370 4841831 4818286 4833931 4815567 4865370
(Source of data: NIS, 2014)
Table no 2.
Breeds of cattle for milk in Romania
Average Average Average Fodder Observations
duration of production content of conversion
lactation of milk/ milk fat (UN/kg of
(days) lactation(kg) (%) milk)
Romanian spotted 340-380 3500-4000 3,8 1,2 Mixed breed
(Grey steppe – Simmental)
Romanian Black 300-360 >4500 3,8 1,0 - 1,1 Mixed breed (Frieze –
Spotted Dobrogea red/Spotted/
Romanian spotted/Pinzgau)
Brown 320-370 >3500 3,75 1,15 Unimproved native breed
Transilvanian 320 -350 1500 - 3000 3,85 1,6 Grey steppe/Mocanița -
Pinzgau Pinzgau
Frieze 280-300 >6000 4,05 0,9 Israeli Frieze – Holstein
Frieze
Simmental 300-330 4500-5000 4 1,0 Imported breed
(Source of data: Acatincăi, 2004)
Table no 3.
Sheep breeds for milk in Romania(Source of data:Gazeta de Agricultura, 2014)
Average Milking Average Average Observations
duration of period production of content of
lactation (days) milk/ milk fat (%)
(days) lactation (kg)*
Palas Merinos 132 40-69 130 20-30 5,4 Breed for milk/meat/wool
Table no 4.
The dynamics of the source cattle and of milk production 2008 – 2013
Specification UM 2008 2009 2010 2011 2012 2013
Total number of 2684 2512 1.985 2.130 2164 2197
cattle out of which
Source cattle thousands 1.639 1.569 1.282 1.312 1.352 1.369
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Table no 5.
Romanian milk and dairy product exports 2008- 2012 (thousands of euro)
2008 2009 2010 2011 2012
Milk and cream from milk, non-concentrated, without 1004 1390 1703 3957 6126
added sugar or sweeteners
Milk and cream from milk, concentrated, with added 13443 12219 16542 22148 18399
sugar or sweeteners
Fermented milk products 2281 2412 2784 4591 8942
Whey and whey products 33 147 609 1175 1841
Butter and other fat milk products 152 294 1151 1662 1436
Cheese and green ewe cheese 5095 7232 14180 13378 27693
(Source of data NIS - TEMPO online, 2014)
Table no 6.
Milk production evolution in the main EU countries (thousands of hl)
Country 2008 2009 2010 2011 2012 2013
Austria 2705 2709 2781 2904 2964 2688
Denmark 4586 4740 4818 4787 4916 4601
France 23814 22842 23361 24602 24534 22357
Germany 27465 28248 28659 29339 29702 27761
Greece 690 684 688 638 664 600
Ireland 5106 4904 5327 5537 5380 5390
Italy 10608 10506 10604 10882 10876 9803
The Netherlands 10936 11085 11626 11642 11676 11171
Total EU - 15 115332 115006 117600 120351 120618 11850
The Czech 2433 2354 2317 2366 2446 2187
Republic
Estonia 614 592 619 624 665 646
Hungary 1425 1407 1322 1308 1398 1235
Lithuania 1382 1276 1278 1317 1360 1237
Poland 9112 9136 8990 9296 9843 9102
Slovakia 946 852 800 811 851 759
Slovenia 524 517 519 526 535 475
Total EU 10 17263 16916 16657 17089 18007 16460
Bulgaria 681 578 539 499 497 455
Romania 1053 979 901 892 884 811
Total EU 2 1734 1558 1440 1391 1381 1266
Total EU 28 134976 134155 136321 139467 140608 130042
A comparison with the previous -0,67% 1,61% 2,37% 0,82% 0,72%
year
(Source of data: Eurostat database, 2014)
Table no 7
Raw milk collection centres, households and total number of animals
2012 2013
Registered/authorised farms, out of which: 2388 2044
- comply with the criteria 2162 1902
- do not comply with the criteria 226 142
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Table no 8.
Average raw milk price evolution at a farm 2008-2014 (euro/1000 l)
Product 2008 2009 2011 2012 2013 Trim. I Trim. II 2014
2014
Fresh cow milk 19.6 20 24 24.7 26.7 27.8 27.6
Fresh sheep milk 32.7 31.3 40.2 41.6 35.6 - 40
(Source of data NIS - TEMPO online, 2014)
Table no 9
Milk and dairy product imports in Romania 2008- 2012 (thousands of euro)
2008 2009 2010 2011 2012
Milk and cream from milk, non-concentrated, without 31686 38881 50754 56619 54622
added sugar or sweeteners
Milk and cream from milk, concentrated, with added 17608 18862 17999 21874 22042
sugar or sweeteners
Fermented milk products 14246 18149 19695 19128 21402
Whey and whey products 7611 6438 6792 6776 8234
Butter and other fat milk products 19528 22108 17157 16307 14307
Cheese and green ewe cheese 84516 77306 81350 100078 102631
(Source of data NIS - TEMPO online, 2014)
Table no 10
The dynamics of the number of sheep/goats and of the milk production 2008-2013
2008 2009 2010 2011 2012 2013
Sheep (thousands) 8882 9141 8417 8533 8834 9136
Goats (thousand) 898 917 1241 1236 1266 1313
Total (thousands) 9.780 10.059 9.658 9.770 10.100 10.449
Total milk production (thousands of 5.917 5.813 6.305 6.127 6.301 6.135
hl)
(Source of data NIS- TEMPO online, 2014)
Table no 11
Milk processing plant situation
No. of Observations
plants
Plants that benefited from the transition period, out of 64 List published on the NASVSA
which: site, at the section Plants
- plants that process compliant milk 51 approved for intra-community
- closed plants 13 exchange, unit 9 – Raw milk and
Approved milk processing plants, authorised from a 168 dairy products
sanitary veterinary point of view for intra-community trade
(Source of data NASVFSA, 2014)
380