The Polish dairy sector has the opportunity to become one of the key players in the global market. Already, we are the third largest country in dairy production in the EU and 12th in the world. Rising domestic and international demand enable further dynamic development. However, the sector faces challenges such as changing environmental regulations, rising production costs, and strong competition. Leading industry organizations have developed a strategy for Polish dairy farming to pave the way for sustainable and profitable development of the sector.
“The industry has prepared a strategy as a starting point for discussions. It’s a roadmap for Polish dairy farming, so we know in which direction we are developing. We believe that Polish dairy farming is now at a turning point in its history because we are becoming a power in milk production,” said Marcin Hydzik, President of the Association of Polish Milk Processors, in a conversation with the Newseria agency.
The “Strategy for the Dairy Industry in Poland” is to outline development paths, taking into account the needs of local producers, consumers, and partners in foreign markets. The document was prepared by industry organizations – the Polish Chamber of Milk, the Association of Polish Milk Processors, the Polish Federation of Cattle Breeders and Milk Producers, the National Association of Dairy Cooperatives and the National Association of Dairymen.
The timeline is long-term, aiming to set certain directions. We realize that it’s not something obligatory, but we need to draw attention to our milk processing companies, cooperatives, to what the market looks like today, how we think they should proceed, in which directions to develop. Hence, this is a document that will be created and will evolve with the development of our industry, hence all dairy organizations operating in the Polish market are involved in its creation,” says Marcin Hydzik.
According to the strategy, per capita dairy consumption in milk equivalents in Poland has remained consistently high for decades, at around 300 kg. Therefore, Polish dairying has access to a large and growing domestic market, with the source of growth being the increasing consumption of cheese.
Since the abolition of milk quotas in the 2014/2015 season, milk production in Poland has been growing by almost 2% annually. During this period, the growth of dairy production in Poland was greater than the growth of its consumption in the country, prompting the Polish dairy industry to increase exports. In 2023, about 20% of production was destined for export. The main source of growth was cheese exports, mainly within the EU. Powdered milk, meanwhile, goes to third countries such as Middle Eastern and North African countries.
“We have a very large surplus of milk, so we have to export about 30% of our products and look for export markets. On the other hand, there is huge competition in the world when it comes to producers, mainly New Zealand and the United States. Many countries will be self-sufficient in terms of milk production, such as China, so we should expect their demand for our products to probably be smaller in the future,” assesses the President of the Association of Polish Milk Processors. “That’s why the most important thing is to make the right strategic decisions. If we have a well-thought-out plan, we will do great on international markets.”
Polish milk processors may therefore be able to enter increasingly financially attractive export markets. Their service requires the Polish dairy sector to introduce in farms and plants such ways of operation as to meet growing requirements. This includes supporting actions in the field of sustainable development and increasing the efficiency of the supply chain.
“The issue of farmers’ legal stability is assured, but farmers are already entrepreneurs, it’s not a hobby, but a business activity, so like every entrepreneur they have to look at costs and profits, they have to keep their own accounts, create business plans,” explains Marcin Hydzik.
Over the past three decades, milk yield has increased from 3,200 to 7,500 kg per cow per year, and is now approaching the levels achieved in the highest yielding countries. As a result of the liquidation of small farms and increased efficiency, the average size of milk production in a Polish farm has increased 15 times in 30 years, to around 100,000 litres of milk per farm per year. In comparison to the size of production of the best farms, production requires another increase of at least 5-10 times. This will enable such incomes to be achieved that breeding will remain an attractive profession. Also meeting future legal constraints related to environmental protection, introduced both at the national level and at the EU level, will become increasingly costly for farmers. It will only be profitable for farms of sufficient scale.
“The main ailments of the industry are currently the rising costs of labor, transport and energy, but also related to adapting to the European Union’s climate policy. Therefore, these basic challenges are to fight costs, relatively low margins of our products, the policy of retail chains that dictate the price, and issues related to export,” lists the President of ZPPM.
As Kazimierz Gwiazdowski’s interpellation shows, rising energy and gas costs significantly burden the dairy sector. There is also a lack of substantive cooperation in areas crucial for the future of the industry, such as support for sustainable agriculture or improving innovation.
“Support should involve helping in negotiations with the EU in creating, for example, a support fund for regenerative agriculture as that which has the least impact on the climate, while at the same time giving farmers very high profits. Without institutional support, also from the Ministry of Agriculture, I think we might not be able to cope. Without additional funds, farmers will not be able to develop such activity,” argues Marcin Hydzik.
The dairy sector is a key element of our country’s economy, and its stability has a direct impact on the quality of life of residents and food security. Gwiazdowski in his interpellation indicates that one of the key problems is the lack of inclusion of the dairy sector in critical infrastructure, the result of which is an increased risk of serious disruptions in the event of interruptions in energy supply, cyber attacks or other crisis situations. In response, the Ministry of Agriculture informed that actions are currently being taken thanks to which it will be possible to amend the Act on Crisis Management so that also the milk sector can feel safe.
“We definitely believe that the dairy sector should be included in critical infrastructure. We applied for it even during COVID times when we were worried about our networks related to transport, interruption of the supply chain and there were indeed some problems, especially when it comes to transport with China. The worst thing is that we only think about it when a crisis arises, and we should think about it earlier so that – for the sake of Poland’s food security – plants that produce basic products would be under protection,” emphasizes the President of the Association of Polish Milk Processors.
