Over the past five years, two trends have been steadily present on the Ukrainian raw milk market: rapid drop in milk production in households and stagnation in the development of industrial dairy farms. – INFAGRO
The brief analytical review presented by Maks Fasteyev, Infagro Project Partner, sows that agricultural enterprises have improved the supplied milk quality. However, no noticeable increase in milk volume has yet been observed. This is hindered by the following reasons: stake on crop production, lack of external investment, land market factor and others.
Will the situation change next year? Infagro analysts have prepared a baseline forecast for production and supply of milk for processing in Ukraine for the next year.
Taking into account the instability of the situation – the impact of global inflation, volatility of exchange rates, etc. – the forecast for the industry is very cautious: in 2022, milk supply for processing can be expected at the level of 3.4 million tons (base 3.4 / 3.0), which is 1.5% lower than the preliminary results for 2021. Supplies from the households will continue to decline, but in the category of agricultural enterprises, an increase is possible.
According to the results of three quarters of this year, presented by the State Statistics Service of Ukraine, the decrease in milk production in Ukraine is about 6.1%. This dynamic is likely to remain and it will affect the annual production figure of 2021. The main reason for the overall decline is reduction in milk production by households, and this trend will continue in 2022.
Agricultural enterprises can show growth in milk. Retention of livestock, successful seasonal forage production and high purchase prices for raw milk give dairy farmers the reasons to expect good profitability. Therefore, in 2022, in the category of agricultural enterprises, an increase in milk production of about 3% is possible.
Thus, Infagro predicts in 2021 a general decrease in supply of milk for processing by 4.3% compared to last year to the level of 3.5 million tons (base 3.4 / 3.0). Forecast for the year 2022: milk supply to processing 3.4 million tons, which is 1.5% lower than the volume projected as a result of 2021.