Tumbling milk prices have enraged European dairy farmers over the past two years, but one Czech farmer has found a creative way to increase profits by bringing his milk directly to customers and, in the process, has created a new business model.
Residents of Plzeň, west Bohemia, have seen something new at farmers’ markets in the past few weeks as dairy farmer Jaromír Boháček has inaugurated an innovative way of selling milk: a milk truck. Boháček, owner of Líšťany Farms, which produces 6,000 liters of milk daily from 236 cows, says low milk prices over the past two years left him in dire straits but have sparked a successful solution.
“We’ve sold milk below cost for the past two years, and of course this has caused us difficulty. We had to come up with a suitable solution for us as well as the customer,” he said. “So we came up with the idea of selling milk from a mobile milk vender.”
Boháček said the mobility of his milk vending machine allows him to sell milk in every district of Plzeň, as well as the suburbs, for 15 Kč (75 U.S. cents) per liter, about the same price as milk in a supermarket. And of course, customers have the chance to buy fresh milk, which has proved a popular novelty. Boháček is considering spreading his route to other villages and cities, depending on demand.
Boháček stopped short of recommending a mobile milk van for every dairy farmer on the market but said dairy farmers need to begin taking their fate into their own hands.
“It’s difficult to recommend anything to other farmers, because every farm has its own specific needs and conditions, so each farmer has to sit down with a calculator and make sure something like this will be profitable. But generally it is a good practice for farmers to sell directly from the farm, and I think it should escalate,” he said.
The mobile milk van is unique in the Czech Republic, but Boháček’s innovation builds on a burgeoning industry of farmer-operated milk dispensers. Milk dispensers are maintained by dairy farmers who are able to deliver raw milk directly to potential customers, cutting out the supermarket middlemen and getting more of a handle on their profits.
Milk dispensers began appearing in the Czech Republic in October 2009, as milk prices hit historic lows of about 6 Kč per pint, leading to 4.5 billion Kč in losses for dairy farmers in the first half of 2009. Industry representatives were unanimous in voicing the need for regulation, but there was no agreement on exactly what form that regulation should take.
“The idea is that, if you put more and more money into the dairy industry, you don’t know if you’ll get it back. But the situation is so bad that we’ve got to do something,” said Barbora Daňková, spokeswoman for Czech milk-processing company Madeta.
The European Union’s solution was to offer a total of 318 million euros in support funds for European dairy farmers in dire need, beginning in December 2009.
But for many Czech dairy farmers, a more fundamental shift in the way they did business was necessary. Milk dispensers offered an immediate solution, both allowing farmers to charge almost twice as much for milk as supermarkets – about 20 Kč per liter – and requiring the customer to provide the bottle, thus advantaging farmers rather than retailers.
Milk dispensers were lauded by the Czech and Moravian Dairy Association, which nevertheless cautioned that more is needed to be done to help support domestic dairy farmers. Milk dispensers are only a viable solution for small dairy farms, according to Dairy Association President Jiří Kopáček.
Nonetheless, “the milk dispensers have improved markedly, and at the moment, there are about 200 in the Czech Republic,” he said.
Many of these dispensers are located at farmers’ markets, such as the one at Prague’s Kubánské náměstí, where excited customers lined up for fresh milk July 10. Toko, the company that supplies most of the milk dispensers, has also begun manufacturing machines offering meat, vegetables, fruit juices and other fresh farm products.
An increase in the popularity of milk dispensers, however, coupled with the growing number of urban farmers’ markets, has given rise to opposition. Tetra Pak, producer of milk cartons for all major Czech milk companies, issued a warning April 26 about the dangers of drinking raw milk from dispensers, saying, “It is important to realize that drinking raw milk, which means untreated milk, is always a risk.”
Jan Veleba, president of the Czech Agrarian Chamber, has called the warnings against raw milk “lies,” saying they unnecessarily disadvantage farmers struggling to make ends meet.
Boháček seems unconcerned about the controversy, which doesn’t seem to have harmed his brisk milk vending business.
“All we are doing is putting 100 percent milk on the market,” he said. “What you usually see in the markets under the dairy products sign should really be under a chemical products sign.”
Source: The Prague Post






