Nettavisen: Early last fall, Nortura took action to reduce large meat supplies. But the first week’s weekly report shows that stocks are only going up.
There are currently 7,376 tons of beef in cold storage. This is 876 tonnes more than before Christmas. And more than two thousand tons more than in mid-October.
As for pork, stocks stand at 3,634 tons, so to speak exactly the same as in December.
– More serious
– Now we have just seen the problems of both eggs and milk, of which there is too little. That meat is piling up now is actually a more serious deviation for the balance of the market itself, says food expert Ivar Pettersen in the Alo analysis.
He is surprised by the development.
– This proved to be very challenging. This means that pork supplies did not decline particularly over the Christmas period, and it is also serious that beef supplies are increasing so sharply, she says.
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Lately we’ve been hearing about shortages of both milk and eggs. But there have also been periods of overproduction of these goods.
– Previously it was normal for Norwegian agricultural products to be dumped in other countries. The World Trade Organization put a stop to this, but that is no longer possible, says BI associate professor Ivar Gaasland.
It’s good news for some, bad news for others.
– When there is a surplus of eggs, meat and milk, you are forced to sell them on the domestic market and at a lower price. It’s good for consumers, but expensive for farmers, Gaasland says.
New price cuts
Last fall, Nortura cut beef and pork prices by 17 percent and 25 percent, respectively, but supplies did not decline.
– I see no other solution than to significantly reduce the price, says Ivar Pettersen.
But if Nortura lowers the price further, this alone is not enough.
– The wild card is whether grocery chains let price cuts pass through to consumers. We saw above that this did not happen entirely. There have even been cases where manufacturers lowered prices, while stores then increased them, Pettersen explains.
He thinks it might be difficult to get rid of large quantities of meat now.
– The beginning of the year is not a season when there is a lot of meat, such as during the grilling season in summer, he says.
– No connection with milk
Nortura confirms that there is a lot of meat in stock.
– It is true that there are now many cattle in regulatory storage, writes Ole Skulberg, director of total markets, at Nortura in an email to Nettavisen.
Last week, dairy farmer Margrethe Aakerøy told Moe that she had slaughtered more cows earlier than expected to limit overproduction of milk.
– The increase we have seen recently is in line with our predictions. This has no connection with the milk situation, Skulberg writes.
He says this about the measures Nortura is taking to reduce large inventories:
– We are entering a period where there will be little cattle slaughter, which means that many cattle will be taken out of regulatory storage. A significant discount of 17% is also given to stimulate increased sales.
But what will happen in the future with prices is uncertain.
– For natural reasons we cannot comment on future prices, he writes.
Difficult to plan
Nortura sells eggs and meat through its own companies, Prior and Gilde. But Nortuar also performs the so-called market regulator function. The tooth has a similar function in the dairy market.
This means that they use tools such as price and taxes to control the quantity produced and that farmers receive a more or less equal price.
– This is central planning of production quantities and prices. It’s not easy, says Ivar Gaasland.
He believes the market can handle this situation better.
– Market mechanisms work efficiently and excellently so that enough can be produced at the right price, he says.
These are the market regulators
Market regulation aims to:
- stabilize agricultural commodity prices and contribute to a more or less equal price across the country
- ensure supply for raw material producers
- ensure supply in all consumer sectors at a more or less equal price
Nortura SA is the market regulator in the meat and egg sector. They have the duty to receive, the duty to provide and the duty to provide information on the regulatory measures implemented.
Tine SA is the market regulator in the milk sector. They have an executive function by proposing and implementing regulatory measures.
Felleskjøpet Agri SA is the market regulator in the cereals sector. They have the duty to receive, the duty to provide and the duty to provide information on the regulatory measures implemented.
Source: Directorate of Agriculture
Recently, people have found egg shelves empty in stores, but Gaasland doesn’t believe this will be a big problem in the future.
– For consumers, this is not so serious. But it is serious for those who do work as market regulators. They will have to open up to imports more often, he says.
– Not like making nails
Both Tine and Nortura are owned by farmers. The farmers’ association believes it is right to stick to the current legislation.
– Yes, absolutely. In order to supply a stable amount of food, market regulators are needed more than ever, now that many of the tools to regulate production have been removed, says Farmers’ Association leader Bjørn Gimming.
He believes it is important to have regulations, among other things, to prevent seasonal variations.
– Producing food is not like producing nails. Production times are long and farmers cannot turn production on and off, explains Gimming.
– What should be done to ensure that there are enough eggs, milk and meat in shops?
– These are products for which we are largely self-sufficient and have the best conditions to produce ourselves in Norway. If it is financially profitable for the farmer, we will continue production, says Gimming.
2024-01-17 18:42:02
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