The DAIRY BUSINESS Conference is over. For the tenth year in a row the dairy industry professionals of Ukraine and companies suppliers for the industry gathered for their forum. Discussions were traditionally friendly and lively.
Vadym Chagarovsky (Dairy Union of Ukraine), Olga Trofimtseva (Ministry of Agrarian Policy of Ukraine), Dr. Jan Maarten Vrij ( Dairy Management Consult, The Netherlands), Alexey Bogdanov (Ministry of Agriculture of Republic of Belarus) and Daniel Doylidko (Milk Chamber, Poland) devoted their presentation to dairy markets analysis. Olga Sikachyna (State Statistics Service) spoke about how the data on dairy industry is collected and managed in Ukraine.
It was nice to listen to the news about the success of neighboring countries in development of dairy production, but comparison of approaches to dairy business in other countries and Ukraine – i.e. support provided to the dairy industry by the state, development of the dairy industry strategy and further following this strategy, high activity on export markets – all this was unfortunately not in favor of Ukraine. Although, it should be noted that our neighbors live in completely different circumstances.
The information that milk production in Ukraine continues to decline was not something new for the delegates representing Ukrainian dairy processing enterprises, as this is what they experience in their daily practice: high milk purchase prices that always accompany the deficit, struggling for suppliers and much more.
The growth of quality milk production by agricultural enterprises which continues despite all the economic difficulties, unfortunately cannot solve the problem of raw milk deficit, because the volume of production is still low and the procurement price of such milk is quite high. However, the increase in production of quality milk by agricultural enterprises is the fact that deserves attention of not only market analysts, but also media. In the wave of publications that accompanied the Conference, very few media noted this success of Ukrainian milk producers.
What are the main concerns of milk processors apart from shortage of raw materials? These are enormous delays in bringing Ukraine’s legislation related to dairy to European standarts, the media hype that starts during election campaigns at the procurement price of milk and the status of milk-containing products. Describing the excessively regulated and sluggish system of procedures for passing laws and amendments to laws, Leonid Kozachenko (Verkhovna Rada of Ukraine, Ukrainian Agrarian Confederation) and Lidiya Karpenko (Union of Dairy Enterprises of Ukraine), called on the industry representatives to join forces to influence the lawmaking process and create for Ukrainian dairy industry the opportunity to work according to dairy industry standards that meet world practices.
Alexander Melnik (Ankar-Agro), Sergei Isaev (Kiezelmann Bel), Professor of the Odessa Academy of Food Technologies Olexander Chagarovsky and Volodymyr Lapa (Derzhprodproptupsluzhba of Ukraine) spoke about modern technologies and control of dairy production. During the discussions on the issues of quality control and safety of dairy products, there arouse the problem of dairy falsification and how to cope with this shameful problem. The range of penalties for fraud proposed by the delegates was quite wide – from the regular increase in fines and frequency of inspections to the prison term.
How dairy producers and trade networks are taking into account consumer needs and his purchase capacities, was the topic of the presentations of Svitlana Zhaglova (Danone), Valeriy Levenstam (Fozzy Group), Victor Korduban (Bilotserkivska Agroindustrial Group) and Mykhaylo Gafurov (Nielsen). The important trends for dairy producers were noted: the desire of consumers for a healthy lifestyle, including consumption of healthy food and a gradual emergence in the domestic dairy market of the products and dishes previously not too common among Ukrainians. There was expressed the view that modern level of logistics and taking into account the growing consumers’ demand for new products could open new prospects for dairy processors.
The purchase price of milk. How to find a balance between the interests of milk producer and processor? For how long will the rural households supply milk to processing enterprises? Is cooperation of milk producers and dairies possible in Ukraine? A temperamental discussion about this issue arose after the speeches of Mykhaylo Travetsky (expert in meat and dairy business), Olena Zhupinas (AVM) and Viktor Korduban (Bilotserkivsky Agroindustrial Group) who spoke about his successful experience in running the dairy business comprising raw milk production and processing. Recalling the successful world experience of dairy cooperation, many of the delegates agreed with the speakers who said that in Ukraine the main obstacle in the development of cooperation is a low level of trust in partners. In the context of general development of dairy industry, the recently announced state support of livestock breeding was mentioned. There was expressed the opinion that it would be reasonable to support not only farmers but also milk processing enterprises.
In general, summarizing in brief opinions expressed by the Conference participants: Ukrainian dairy industry is now a reflection of the general state of the country’s economy. The impoverished consumer, raw milk shortages, the excessively regulated legislation, falsification in dairy production and gray trade schemes are the areas that require firm actions to correct the situation in dairy sector. But against this background there is a stable growth of quality milk production by agricultural enterprises, expansion of Ukrainian dairy to new export markets and – most importantly – the availability of people who want and are capable to get engaged in this difficult but noble and promising business.
The organizers express their sincere gratitude to sponsors, speakers and delegates of the Conference for their active participation in the event.