Latvian producers pin hopes on Agrone deal to lift milk prices
Agrone's bid to acquire the Riga and Valmiera dairies — a move that would make it the Baltics' largest milk producer — may lift milk prices for farms and cooperatives across the region, Latvian producers hope. The deal still requires approval from competition regulators in both countries.
The combined processing capacity of the two Latvian dairies is comparable to the new Paide production complex — 1,000 tons of milk per day. Part of that capacity is currently unused. The difference is that Paide plans to produce large volumes of so‑called bulk products, while the Latvian companies focus on fresh dairy products. The well‑known brand Kārums is just one of their popular labels.
"We specialize in producing high value‑added products. That is what gives us strength and what we enjoy doing. We work very actively on export markets — every year we grow sales by two percent. Our products are already represented in 30 foreign countries. Every month new markets are added where we can sell our goods," said Artūrs Čirjevskis, chairman of the board of the Rīgas piena kombināts (Riga dairy plant).
Herd sizes differ across the Baltic states — in Estonia the average herd has 200 animals, in Latvia 15, and in Lithuania 5. Agrone's three farms produce 190 tons of raw milk per day and have 5,000 dairy cows and 4,000 young animals — top‑producing Holstein cattle.
"All companies in the sector — their success and prospects — depend on investments. And you can invest only when you have supply security. All factories should operate at maximum capacity. For more than 10 years, our work and goal has been to find a way to process our milk under long‑term cooperation. That is the direction we have been moving toward," said Agrone owner and CEO Raul Jeets.
In Latvia, including at the Riga dairy plant, potential new owners are viewed as investors, because these factories need investment, and overall it would benefit both farmers and cooperatives.
Latvian milk producers are primarily interested in a higher purchase price. The Baltic milk market is unified — milk is sold wherever it is most profitable, and products from neighboring countries are available on shelves everywhere.
"Latvian farmers hope that if the Paide deal goes through and the Riga dairy plant is run at full capacity, processing volumes will increase and therefore demand for raw milk will rise. The greater the demand and competition, the better the price that can be paid. This is currently the main expectation of all Latvian farmers," said Valters Zelčs, expert at the Latvian producers' association Zemnieku saeima (Farmers' Parliament).
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Editor: Marko Tooming, Argo Ideon
