Livestock and Diary of Serbia

Whilst in EU countries livestock production participates around 70% in gross production of agriculture, in Serbia it is only 32%. Biggest contribution in those 32% comes from swine farms 12%, cattle farms participate with 6%, diary 5%, egg production 3%, sheep farms 1.5%, poultry 4%, and rest is vegetable production. In Serbia out of 1.1 million farmers approximate 700 thousand is in livestock production.

Period from 1985 - 2005 was disastrous for livestock production in Serbia, number of cattle has dropped for 886 thousand heads (43%), cow and heifers for 445 thousand heads (36%), swine for 1.5 million heads (30%), sheep for 1.2 million heads (56%), poultry for 5.6 million heads (23%). Therefore in the year 2002 total number of cattle as dropped to 1.2 million heads, swine 3.6 million heads, sheep 1.4 million heads, and chicken approximately around 19 million heads... around 90% of livestock is in the private household farms. This decreasing trend has continued till today.
           At the same time meat production has decreased for 140 thousand tons (23), moreover production of milk and eggs has decreased too.
           Negative tendencies in production are partially result of constant decreasing of productivity, whilst production in Serbia is around 118kg per hectare of agricultural acreage, in Denmark it is 8 times more, in Germany 5 times, and in France 2.5 times more kilograms per acreage.

Moreover as living standard has decreased, meat consumption has decreased too, from 65 to 40 kg. Export of meat and milk product has dropped to 25 million dollars per year ( export used to be ten times bigger); slaughterers have lost license for exporting, and in the meantime all sorts of animal infectious diseases have developed due to lacking in veterinary - sanitary treatment, which further more added to loosing license and stopping the export. The appearance of "crazy cow" prion infection   and some other livestock diseases registered in EU, lead to forbidding of the import of brood material, which has become additional handicap for farmers.

Yearly milk production in Serbia goes up to 1.9 billion of litres, in which when we consider the population number, we can compare with other developed European countries. Milk production and processing is being done in 36 large and approximately 190 small diaries, including agricultural cooperatives. Diary usage coefficient is only 60%, nevertheless yearly production of milk per cow is from 3500 litres on small dairy farms, up to 6500 litres at big dairy farms.

          Investment fund „Salford" from London has invested around 80 million euro, and bought greater stock part of five largest Serbian dairies, covering around 50% of the milk products market in Serbia. That fund has became majority owner of Serbian greatest diary „Imlek" under whose management is also other smaller dairies in Belgrade, Pozarevac, Sidu, Cacak, Kraljevo, Vrsac and Petrovac. Moreover, Salford has become majority owner of dairies in Novi Sad, Subotica, Zemun, and of „Impaz" Zajecar too. Salford has invested 34 million euro in "Imlek" which has created conditions for its modernisation and joining in to modern European trends.  "Imlek" covers 50% of total milk production in Serbia, they collect and process over 235 millions of litres of milk.

         The plan provided for next period is to increase milk purchase, which means further development of raw material base by increasing of the quality and quantity of raw milk. "Imlek" covers around 34% of pasteurised milk production, 54% of sterilised milk products, 33.5 % of yoghurt production, 40% of cream production and 23 % of cheese production in Serbia. It is planned to develop 12 new products of sterilised milk, yoghurt products and cheese, and if we add newly bought dairies in Novi Sad, Subotica, Zemun and Zajecar, share of Salford in total milk production in Serbia is significantly increased. Goal of that investment fund is consolidation of all dairies and merging them all in to one system which will be profitable, and to use all the benefits of the companies which have become part of the merged company which is now under name "Danube foods". In several years that would result in increasing of production and that would also lead to increasing of the price of dairies and selling of stock at stock market would give good profit for Salford.

          French company "Bongraine" who has managed to become owner of "Mlekoproduct" from Zrenjanin, is the competition for Salford, then dairy farm Sabac, small diaries and foremost importing companies such as "Danone" who have started very aggressive campaign with their fruit yoghurts.

Consumption of milk and milk products
          Serbia is not among big milk consumers, as consumption of milk in Serbia is around 382 milllions of litres. However in past couple of years very positive change has been noticed, that milk consumption has trend of increasing. Year 1997 has marked little bit less than 37 litres per person, whilst in 2002 the consumption has increased to 46 litres, in the year 2008 milk consumption has gone up to 78 litres of milk, nevertheless Serbia is at the bottom of the scale comparing to other European countries . Main reason for that is that consumption of milk is mainly oriented to milk and yoghurt in very small quantities, where cheese, and other milk product are completely neglected. Major problem is that big percent of kids (nearly 40%) does not drink milk.

 There are big differences in milk consumption if we compare different regions, so in cities consumption is around 58 litres per person, and nearly seven litres of milk products, whereas in countryside households that consumption is much larger, around 81 litres of milk and 11 litres of milk products, mostly because of greater availability of milk and milk products.

 Small consumption of milk and milk products is mainly because of the low buying power of our population, and because of the fact that beside milk and yoghurt we barely buy and use other milk products, also there are different brands of cheese that are being imported which also affects the consumption. It is necessary to try to enrich the fruit yoghurt, cream and cheese offer, to try to attract people to buy and consume more of the milk and milk products.

Reorganisation of diary through technological development and modern marketing is certainly going to increase production and lead to profit. That way Serbian producers will be given chance to increase their share in foreign market of milk products. However, to reach to profitable production,  it is needed to lessen the number of offered products, to modernise the diaries, to lessen the number of workers, and maybe to close down non profitable diaries, as their closing will increase non used capacities of other profitable diaries which are not fully in use.