Italian dairy farmers are the latest in the European agri-sector to report an impending crisis as the costs of energy, animal feed and other necessities are slashing margins and profits, and may force some farmers out of business entirely.
The renewed invasion of Ukraine by Russia has led to a surge in prices for many key products in Italy. Prominent among them is energy; Italy relies on around half of its imported gas from Russia and the effect of high prices are having a pronounced influence on Italian businesses.
A growing number of Italian dairy farmers are now facing a crisis over the surge in prices of energy, such as electricity and diesel, and rises in various kinds of animal feed such as corn for their cattle.
The Italian Institute of Services for the Agricultural Food Market (ISMEA) has reported that some farmers and dairy producers may be forced to close as a result of the increasing prices, Il Giornale reports.
According to the report, producing milk now costs between 50 and 55 euro cents per litre, and at those prices producers are making just 4 cents per litre in profit. At the start of this century farmers were making 12 cents per litre. Any further increase in prices to produce milk would likely mean producing it at a loss in future.
Some Italian companies, such as Granarolo, a food company specializing in dairy, meat, pasta and vegetables, have offered more money to dairy farmers in an effort to keep them producing, in amounts well above previous agreements from last year.
Italy is one of the largest dairy producers in Europe, with only Germany, France and the Netherlands producing more milk per year in 2020, according to European Union statistics.