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Economy

Greece’s Floods That Killed Sheep, Goats Now Drive Up Feta Prices Too

ATHENS – Already struggling with inflation and costs soaring in the aftermath of deadly floods that wiped out much of the country’s agricultural heartland in Thessaly, residents in Greece are also seeing the prices soar for the famed Feta cheese.

Along with olive oil – also being priced out of reach for many – the cheese comes from the milk of goats and sheeps, some 80,000 which drowned during the floods that submerged farms and where they graze.

In a review, The Financial Times indicated how the devastation would hit buyers in their wallets and at supermarkets, the government backing away from an earlier pledge to reduce a 24 percent Value Added Tax (VAT) on food.

Some 40 percent of the country’s soft cheeses are made from sheep and goat milk produced in Thessaly, and also wiped out were feed, what they eat, also adding to the costs of producing cheeses.

https://www.ft.com/content/f08ed798-8c9e-4500-b830-8c694e523fc1

“The largest blow is that many breeders in the area say that after the flood, they don’t want to return to their profession,” Christos Apostolopoulos, President of the association of Greek dairy industries, told the news site.

The New Democracy government is providing partial subsidies but farmers say it’s far less than they need to recoup and for many not enough to get back to the business of producing food for the country and exports.

The damage has been put as high as 5 billion euros ($5.24 billion,) about half of which will be covered by the European Union, but coming on top of the cost of subsidies after summer wildfires has hit coffers hard during a rebound.

Adding to the misery and dilemma is that much of the flooded land was left with so much mud and silt that it could be unusable for years, leading to farmers giving up the idea of trying to grow crops.

“Everyone talks about the cost of the floods . . . in a few months, there will be chain reactions (leading) especially small businesses to collapse,” said Yannis Karastergios, an agricultural consultant in the area.

A DAIRY DILEMMA

Besides lost livestock, he told the business newspaper that many warehouses could not be repaired, with farmers losing tonnes of feed. “Years of hard work were destroyed in two days,” said Karastergios. “It’s not easy to recreate warehouses and set up a herd from scratch,” he added.

Greece makes about 140,000 tons a year of feta, exporting about 65 percent of the production – just as most olive oil is sold to other countries instead of being marketed and sold around the world as a Greek product.

“Producers will face a dilemma soon, as they will have less milk production; they will have to choose where to send their products,” said Apostolopoulos, who estimates that feta makers will focus on export markets instead of domestic.

“The shortages will be more apparent in Greece,” he said. Greece’s largest feta factory is Hellenic Dairies, based in Trikala in northwestern Thessaly. It had to shut down for two weeks as water and mud covered the machinery, with estimated damages of 25 million euros ($26.21 million,) the report said.

It has reopened but Chief Commercial Officer Stelios Sarantis, said the company will have to take much of the hit instead of passing on costs to consumers that could drive down demand because of the jumping prices.

“Every year, we fund animal breeders,” he said. “This time, the amount that we will give will be larger, we have no other choice,” he said, the company relying on them to make the treasured commodity.

Before the floods, Feta prices had already gone up some 40 percent despite being domestically-produced, and that saw sales fall off about 10 percent, no estimate what it would be with the coming even higher prices.

But that means the drop in production won’t be felt as much. “There will be less feta around, but I don’t think there will be any shortages,” said Sarantis, the government trying to get supermarkets to hold the line on essential goods prices.

Another feta maker, Nikolaos Bizios, of Bizios Dairy Industry, said prices for the cheese could spike even more if animal feed costs increase. “It’s a hard equation that needs to be solved, as crops and factories with animal food have been flooded,” he said.

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