High raw milk purchase prices work towards the increase of the volume of industrially processed milk

Since the beginning of the year, Ukrainian agricultural dairy farms have increased milk production by 1.3% compared to the same period of thevprevious year. In August the growth was 3.6% compared to August 2016 – INFAGRO

In September dairies were struggling for milk and milk procurement zones even more intensively. Accordingly, the purchase prices for raw milk showed rapid growth. Against the backdrop of dairy export prices and appreciation of dollar to hryvnia rate, the value of dairy commodity products strengthened, therefore spot milk prices also went up.

The favorable price trend affects official statistics. Milk production considered within the period of Jan-Aug continues to decline (-0,9%) and constitutes 7,171 thousand tons. General picture does not look so positive because of the decline of milk production in households (stable decline -1.6%).

Agricultural enterprises show significant progresss: since the beginning of the year they increased milk production by 1.3% compared to the previous year, and in August the growth was 3.6% compared to August 2016. If this trend continues, the performance indicators of agricultural enterprises for the year can reach +2%. If the State Statistics Buareau calculations are correct, in the third quarter we can expect a serious increase in industrial dairy processing.

The rate of the livestock decreasing has also reduced. The number of cows in the country continues to decline: at the end of August the figure was 2,131.6 thousand which is 2% lower than in the same period of last year. However, this percentage decline was the weakest in comparison with all the previous months of 2017.

The high purchase price of milk allows producers to be not just profitable, but super profitable. This is a must to make use of the favourable situation – to purchase and improve livestock and invest in new dairy farms and projects.


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