Summer has already begun, but dairy operators still do not have a clear  vision of the sales prospects.

The demand prices on the domestic market has fallen. Consequently, the demand and milk prices declined.

There are many questions arising: what to do and where the way out is…

The farmers feel indignant remembering the recent milk price at about USD 0.50-0.60/l.

The situation might have been different if milk production  could be approximately 10% lower. Then the country would not be dependent on export markets. But in this case Ukraine would get to other dependence, as dairy goods importer. It would be much worse. Then only farmers would gain, but the interests of processors and consumers would be damaged very seriously. After all, Ukrainians buy less dairy products even at current prices. Generally, even at present volume of production Ukraine could be a big importer of dairy products if consumers purchasing power was high…

There are no preconditions for the increase of the world prices now. So, there are not many ways out from this difficult situation. It is necessary to just wait. The cow slaughtering will definitely grow, but otherwise farmers may lose everything.

If there were no war with Russia, the situation would be much better, but not easy either. In Russia the prices have fallen. Nevertheless, there is a small hope that this country will renew trade relations with Ukraine. In particular, these days Rosselkhoznadzor (Federal Service for Veterinary and Phytosanitary Surveillance) renewed the deliveries of dairy products to Russia from two Ukrainian dairies. At the same time, there is no confidence that the Russian indulgences will last for long. Some got trade permission, but some lost even permission for transit through Russia to other CIS countries.

Renewing of trade with Russia was obviously not the merit of the Ukrainian state authorities. They did not make any special efforts for that. They are reporting about the big work done for entering the new markets of Asia and Africa and about the EU trade prospects. Some of their statements sound quite ridiculous: ‘Ukraine doubled export of dairy products to the USA. Vietnam, Pakistan, the Republic of South Africa, Mongolia and Afghanistan are now among importers.’ Of course, it is possible to increase export to the USA from 20 t to 40 t and declare that it was doubled, but not increased just by 20 t. Other countries mentioned were buying much more Ukrainian dairy products in 90s, but both then and now only very cheap milk powder and whey powder were sold.

Only lobbying of several bills which at least do not hamper activity of milk operators may be considered as real assistance of Ukrainian authorities to dairy sector. In particular, the populist idea of a deputy on legal fixing of the minimal milk price was rejected.

The Agrarian Ministry promised to allocate UAH250 mio for purchase of cattle, building and modernisation of farms. Some time ago this amount would look considerable, but now it may suffice only for construction of several farms or even for one big project … The officials even promise 50% compensation of the rate of the National Bank of Ukraine.

The Ministry of Agrarian Policy also speaks against abolishing the VAT special regime for farmers.

Vasyl Vintonyak, Director INFAGRO