The Agriculture and Food Chamber (KGZS) expects the prices to drop further in Slovenia, as well as a decline in the number of producers, which "is already happening".

Milk prices have fallen as a result of the scrapping of the EU milk quotas earlier this year as well as due to the Russian food imports embargo introduced last year.

"It is true that every drop is followed by a new price stabilisation, which is likely to be at lower than current levels though," the chamber said in a written response.

A monthly report from dairies shows the average farm-gate price for standardised 3.7% fat and 3.15% protein milk in June was EUR 28.05 per 100 kilos, with the average price considering the fat and protein content at EUR 29.93 per 100 kilos.

The biggest fall in milk prices in the EU was recorded in Estonia, at an annual rate of 29%, followed by Latvia and Hungary (-28%), while prices stayed unchanged in Cyprus.

Prices of dairy products have also been falling, except for the Emmental cheese.

Cow milk production is a major section of Slovenia's agriculture industry. A large portion of the milk produced in the country is exported to Italy, which exports worldwide.

This is why the situation in Slovenia depends strongly on the situation in the European and global markets, the Ministry of Agriculture, Food and Forestry says.

Milk is produced in much tougher conditions here than in other large producers, considering three-quarters of the country's territory is less suitable for farming and the herds are small.

This is why the KGZS believes the country should focus on the production of high-quality milk and high-quality dairy products. "We do not think we can keep up with the competition in raw milk sales."

Slovenia is also looking for alternative markets and has recently initialled with China a protocol on veterinary and health requirements for dairy products, a key condition for the approval of milk and dairy exports to the country.