Ricing management in milk production

ABSTRACT

Pricing management is part of farm management with the purpose of increasing profitability and competitiveness. It is based on the production cost and purchase price which difference affects to the financial result. The aim of this research is to identify milk price volatility at the Croatian and EU level, international trade, as well as to identify trends for the period from 2016 to 2020 and to simulate changes for the next period from 2021 to 2025. The analyzed data were taken from the Eurostat and processed using time and harmonized index. Milk production in the EU-27 for 2020 is 23 mil. tons of milk and averages 65 kilograms milk consumption per capita. The lowest average production price of milk in the analyzed period at the EU-27 level was in 2016 (28 per 100 kg of milk) and in following years it is up to 35 per 100 kg. The market situation reflects the consequence of the abolition of quotas in the dairy industry (2015) and the impact of the COVID-19 pandemic. In period from 2021 to 2025, a slight growth and slowdown in milk production of 2.83% compared to 2020 and an increase in the average producer milk prices in 2025 by 9.6% compared to 2020 are projected. This research contributes to identifying the sources of difficulties in managing prices. The guidelines have been developed for more efficient price management in order to improve the competitiveness and market positioning.