NewsDairy market of Russia is going down during two months already. Prices for milk and dairy products are stably falling.
There are surpluses on the market, because of falling consumer demand, and increased milk production and its processing into commodity products.
On April 10 at working meeting the Head of the Department of Animal Husbandry and Breeding Vladimir Labinov reported that in the agricultural organizations the production per cow increased by 7.1% in the first quarter 2015 in comparison with the same period of last year.
Therefore, despite resistance of farmers and the authorities, milk prices continue declining. Now they are reduced by RUB 0.50 in comparison with their level in the end of March.
In the middle of April milk is on the average valued at RUB 19-24/kg. Concern of farmers is understandable, taking into account that according to National Dairy Producers Union Souzmoloko the cost of production makes RUB 23-24/kg at new farms, and RUB 16-17/kg – at old ones.
Officials also become concerned over possible change of positive dynamics on milk production already in second half of the year. At the mentioned meeting of the Department of Animal Husbandry and Breeding there were proposals on market regulation of the situation (to make commodity interventions when supply is high), and non-market regulation (introduction of fixed floor and ceiling prices for milk).
The only one thing is clear – milk production will seasonally grow the next months, and the prices will fall. In those conditions the farmers will be compelled to refuse additional milk: either to change feeding sistem, or to increaseculling of cattle, and at worst – to leave the business.