DAIRY BUSINESS – 2021

XIII National Conference with International Participation

25 May 2021

Organizers: Infagro, Dairy Union of Ukraine

Speakers:

The XIII Annual DAIRY BUSINESS conference, that has been postponed three times, has taken place. After this meeting of dairy processors and dairy farmers, we can already say that this meeting should have been held even in the difficult conditions of the pandemic in which we now live. A lot of new things were heard and many interesting thoughts expressed.

At the same time, there is an impression that some theses, repeated from year to year, are eternal for Ukrainian dairy industry. For example, “we need to unite Ukrainian dairy processors associations into one”, “processors need to unite with milk producers”, “our official dairy statistics cannot be trusted”. And if the latter – the quality of official dairy statistics – can hardly be influenced by milkmen, the embodiment of ideas regarding uniting is completely in their hands.

Perhaps unification is not an easy process and it takes time to activate it and get the results. The trigger could be the emergence of a common threat, which would simply force to unite. There have been talks about unification for several years, that is, during quite sufficient time. And the threat to the dairy sector, seems also recognized by everyone who works in dairy. Active participation of milk producers in the DAIRY BUSINESS conference held by processors, and active, open and even heated discussion on the mutually interesting issues, is perhaps a sign that the topic of uniting two still autonomous dairy wings of the industry from the phase of “expressing deep concern” finally will enter the active action phase. Moreover, it can happen both at the level of various industry associations and at the business level. I wonder exactly where this will happen faster.

An overview of the state of the dairy industry in Ukraine, traditionally presented by Vadym Chagarovsky, Chairman of the Dairy Union of Ukraine, once again confirmed what the delegates know from their own practical experience in recent times: there are few reasons for optimism. Every next year less and less milk is produced in the country. Milk is expensive, and even the onset of the season this year did not affect its high purchase price. Moreover, most dairy businessmen believe that such a high price will stay during the coming years, because there are no reasons for its decline and they are unlikely to appear in the near future. This means that the coming years will be difficult for the industry, both for milk producers and processors.

14 dairy enterprises of the Dairy Union are making efforts to protect the domestic market from the dominance of dairy imports. These attempts will continue. Negotiations will also continue in the direction of uniting the country’s dairy associations and protecting the domestic producer. This was stressed by Arsen Didur, Union of Dairy Enterprises of Ukraine.

In contrast to what was presented by Christophe Lafougere, GIRA, who spoke about good prospects for the global dairy industry and opportunities for Ukraine, and what Alexei Bogdanov, Ministry of Agriculture and Food of the Republic of Belarus, shared on the country’s dairy industry growth, the prospects of Ukraine look more than modest. In any case, for the next few years.

Despite the overall pessimistic picture, the speeches of the dairy companies representatives at the conference prove that the dairy business does not give up so easily. Julia Demchyk, Molokija, and Asel Satenova, PepsiCo, enthusiastically talked about what marketing measures they are using in the difficult times of the pandemic and what they have achieved. Maryna Kostromina, KANTAR Ukraine, brilliantly hosted a panel dedicated to marketing, presented a vivid picture of the changes that have occurred in dairy consumers behavior. Kostyantyn Hrechyna, FSS Ukraine, spoke about new opportunities for HoReCa in the modern conditions of food trade.

There are also positive changes in milk production sector. The delegates learned a lot of interesting things from the speeches of Iryna Vysotska, QFTP, and Vladyslava Magaletska, State Service of Ukraine on Food Safety and Customer Protection. Close cooperation of the Swiss-Ukrainian Program “Higher Value Added Trade from the Organic and Dairy Sector in Ukraine” funded by Switzerland and implemented by the Research Institute of Organic Agriculture (FiBL, Switzerland) in partnership with SAFOSO AG (Switzerland) and the State Service of Ukraine on Food Safety and Customer Protection is obvious, and the results of their work will be available to dairy processing enterprises of Ukraine. Olena Dadus, the Ministry of Economy of Ukraine, also called for optimism and using the support opportunities provided by the state. She called not consider this impossible due to the too complicated procedures for getting it, which were mentioned by some processors.

Milk processors understand that the state of the industry depends primarily on the availability of sufficient volume of high-quality and price affordable raw milk. Maks Fasteyev, Infagro, who moderated the discussion on the quality of raw milk, gave an in-depth analysis of the economics of production and the current state of processing profitability.

Active participation of the delegates in the discussion that beholded afterwards, showed that this issue worries everyone. Active, although sometimes very hot, discussion took place with participation of the representatives of milk producers Anna Lavrenyuk, AVM, Anna Bindrim, Milk of the Motherland, and processors Elena Akulova, Laktalis, Oleksandr Radchenko, Kupyanskiy MKK and many other participants from the audience. It makes possible to assert that the convergence of producers and processors is taking place and, perhaps, soon we will see the first mergers.