Understand it who are able. Milk prices worldwide fall like a stone and it has nothing to say for Norwegian dairy products. Nor imported yogurt and cheese are affected, it looks like.
But Grandiosaen and other Norwegian frozen pizza can be cheaper.
There are currently over production of milk and milk products in the world, particularly in Asia. The international milk prices has fallen by about 50 percent over the past year, while milk prices in Europe have fallen by 18 percent, according to statistics from the EU.
At the same time we in this country that farmers never before gotten better paid for the milk they supply to the dairy frosting. Last year they averaged 5.28 kr paid for each liter. For comparison gets farmers in Sweden 3,23 SEK for their liter of milk.
– This is primarily due Norwegian agricultural policy. Agreement on Agriculture, market regulation and tariff protection creates predictable conditions for agriculture in Norway. It is why we are able to have the price to the farmer we actually have, says senior adviser Hans Kjetil Bjørnøy in Agriculture Directorate.
See how things are with Norwegian dairy here (case continues below the video)
Food Spring – ep. 3: Liquid concentrate?
Why cheaper pizza and chocolate?
Okay, so understand we the Norwegian milk live their own lives without being influenced by prices abroad.
But why would Grandiosaen be cheaper while the international milk prices fall? Grandiosaen been created by Norwegian agricultural products.
The answer is called Raak scheme and is a tilskkuddsordning for Norwegian products with Norwegian agricultural raw materials will compete against international products in Norway. A typical example is Orkla Pizza pizza.
They use expensive Norwegian ingredients in their pizzas, including cheese. Out in freeze disks is the side by side with pizza from Dr.Oetker from Germany, made with European cheese at a far cheaper price.
Tax Money for the pizza rescue
For Grandiosaen should be competitive against the German pizza, paying Norwegian government grants to Orkla, called Commodity price compensation (Raak). This is adjusted annually, the last time just before Christmas. Since then, prices have fallen further, while Orkla argue that the subsidy is not adjusted accordingly.
– If the price difference between Norway and the EU increases, we adjust up grant. This grant will cover up for a deteriorating competitive position, says section chief Jens Tjentland in Agriculture Directorate.
– In other words, when will the pizza be cheaper?
– Yes, that’s right in theory, says Tjentland.
But does it work in practice? Orkla claim that with the current price scenario, their competitiveness has been weakened because the authorities have not taken into account the fierce price decline when they fixed the rates before Christmas this year.
– The International milk price has importance for competitiveness of pizza. But how much changes mean price depreciation is the Department of Agriculture who decides, says executive director of communications Håkon Mageli Orkla with a clear stab to the authorities.
Getting more than before, but want even more
He says that Orkla has received less subsidy for each produced pizza now than they did last year, although the overall have increased grants.
– The set ourselves puzzled by, given the situation in the EU purposes and are ignored. Our competitiveness is weakened, argues Mageli continues:
– The big fall in international dairy prices came as a surprise to many, also on Norwegian authorities.
In the letter which the Ministry of Agriculture determines rates it says that the dairy market in Europe is in a special situation and that the rates for 2015 do not provide full compensation as they are today. However, they open for extraordinary adjustments during the year, and they also writes that the upper and lower compensation evens out over time.
– We agree that we miss. This goes a little both ways, said Tjentland.
He adds that there are many factors that play a role in this calculation in addition to commodity prices, including exchange rate and how much is sold by the various items. Allocations are given in connection with agricultural settlement. Tjentland looks rather not ignore the fact that the Ministry may change rates during the year if they are approached about it.
Orkla get 100 million in grants from the state
Mageli Orkla believes that international prices often change faster than the Department adjusts its supplements.
Also, other products containing dairy products, such as chocolate, can get extra support in connection with that milk prices abroad fall.
– Orkla is through brand Nidar also a major producer of chocolate. Should chocolate also be cheaper?
– The three main ingredients of chocolate is cocoa, sugar and dry milk. Cocoa is the main raw material price ratio, and it has risen recently. Meanwhile, the exchange rate much to say for our prices. The Ministry of Agriculture determines Raak-subsidy. There are grocery chains and their profilhus sets the prices to consumers, says Mageli.
Total gets Orkla annual NOK 100 million in cost depreciation from the Norwegian State.
When Orkla presented its results in early February, they said to Aftenposten that they expected more expensive food in the future. The reason is the weak Norwegian krone.
Hardly cheaper yogurt
But what about dairy goods, then? In recent years, imports of yoghurt skyrocketed. One of the major players here are Synnøve Finden with its Greek yogurt. But they doubt that the yogurt to their being cheaper at first.
– Milk price in Greece is among the highest in Europe and has not followed the rest of Europe in the fall, so we do not envisage any cheaper yogurt near future, says Lived.
While the price of milk in the EU average has fallen 18 percent, prices in Greece fell by 5 percent.
– It is nevertheless somewhat lower milk price in Greece than in Norway. Why does not reflect in the price?
– We buy a finished product in Greece and import it. Then comes the customs fee on top. In addition, authorities have made it less attractive to import yogurt, so this is more complicated than that, says Jan Lived, owner and CEO of Scandza, the company that owns Synnøve Finden.
Importing tons with cheese
In addition to yogurt, we imported approximately 10,000 tons of cheese in 2014. Converted in milk consumption are talking about up to 100 million liters of milk. For comparison, we imported about 7500 tons yogurt, equivalent to approximately 8 million liters of milk.
– When can we expect us cheaper imported cheese in the future?
– food chains decide the prices they will sell the cheese. Directorate of Agriculture can not add some guidelines for this, the minister says.
Rema 1000 and Norway, which owns Kiwi, Menu and Spar, are major importers of cheese to Norway. Rema 1000 will not say anything about what international low milk prices mean for their cheese imports.
– We have cheese products stored anywhere from a few days, for example cream cheese, to two years in our range. This, combined with long-term agreements, allows immediate changes in the spot market does not necessarily provide immediate impact on price in store, says communications manager Kine Søyland in Norway Group.
She adds that the Norwegian currency has weakened radically over the past months.
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