Ukraine: Surpluses of Raw Milk are Putting Pressure on Purchase Prices
Source: The DairyNews
Raw milk prices in Ukraine continue to fall due to increased production volumes in household farms and the emergence of production surpluses at dairy farms. However, the situation may change with the onset of summer heat and if Ukraine increases its export volumes of exchange goods, reports Georgiy Kukhaleishvili, an analyst at the Association of Milk Producers of Ukraine.
As of May 5, the average purchase price of extra-grade milk was UAH 13.73 per kg, excluding VAT, which is 39 kopiykas less than a month ago. The price range for this grade in farms varies fr om UAH 13.40 to UAH 14.20 per kg without VAT. The upper limit of the price range decreased by 60 kopiykas, and the lower limit decreased by 10 kopiykas over the last month.
The higher grade milk on average costs UAH 13.73 per kg without VAT (-39 kopiykas). Prices for higher-grade milk range fr om UAH 13.40 to UAH 14.20 per kg without VAT. Compared to the monitoring results fr om the second half of April, the lower lim it of the price range decreased by 10 kopiykas, and the upper lim it decreased by 60 kopiykas.
The average price for first-grade milk was UAH 13.05 per kg without VAT, which is 37 kopiykas less compared to the price in the second half of April. The minimum price in farms was UAH 12.65 per kg, and the maximum price was UAH 13.40 per kg. Over the last month, the lower limit of the price range decreased by 10 kopiykas, and the upper limit decreased by 70 kopiykas.
Accordingly, the weighted average price of the three grades amounted to UAH 13.50 per kg without VAT, which is 38 kopiykas less than a month ago.
Georgiy Kukhaleishvili notes that significant surpluses of raw milk continue to press down purchase prices in Ukraine. Since mid-April, household farms have seen an increase in milk production due to warm weather. Milk production is also increasing on dairy farms. Under such conditions, dairy processing companies buy certain volumes of raw materials from household farms, as it costs less than on dairy farms, and use it for the production of dry milk and casein. As a result, prices for raw milk on dairy farms are falling, especially for large batches. The reduction in purchase prices for raw materials contributes to the improved profitability of production of exchange goods in Ukraine.
The recovery of global consumption and prices for dairy products creates favorable conditions for Ukraine to increase its export of exchange goods. In particular, raw milk in Ukraine costs 25% less than in the EU. However, the increase in import volumes of cheeses affects the reduction in consumption of domestic producers' products on the internal market, which also restrains the growth of prices for raw milk. Cheese production requires significant volumes of milk, and a reduction in demand from cheesemakers leads to the emergence of surpluses on the market, which pressure prices. It is likely that there will be another reduction in prices for raw milk on those farms wh ere it costs more than 14 UAH/kg without VAT in early June. However, from the second half of July in Ukraine, prices for milk are likely to strengthen under the influence of summer heat. Purchase prices may align with European ones if Ukrainian exporters increase their deliveries of exchange goods to foreign markets.
Press Service of the Association of Milk Producers of Ukraine
The higher grade milk on average costs UAH 13.73 per kg without VAT (-39 kopiykas). Prices for higher-grade milk range fr om UAH 13.40 to UAH 14.20 per kg without VAT. Compared to the monitoring results fr om the second half of April, the lower lim it of the price range decreased by 10 kopiykas, and the upper lim it decreased by 60 kopiykas.
The average price for first-grade milk was UAH 13.05 per kg without VAT, which is 37 kopiykas less compared to the price in the second half of April. The minimum price in farms was UAH 12.65 per kg, and the maximum price was UAH 13.40 per kg. Over the last month, the lower limit of the price range decreased by 10 kopiykas, and the upper limit decreased by 70 kopiykas.
Accordingly, the weighted average price of the three grades amounted to UAH 13.50 per kg without VAT, which is 38 kopiykas less than a month ago.
Georgiy Kukhaleishvili notes that significant surpluses of raw milk continue to press down purchase prices in Ukraine. Since mid-April, household farms have seen an increase in milk production due to warm weather. Milk production is also increasing on dairy farms. Under such conditions, dairy processing companies buy certain volumes of raw materials from household farms, as it costs less than on dairy farms, and use it for the production of dry milk and casein. As a result, prices for raw milk on dairy farms are falling, especially for large batches. The reduction in purchase prices for raw materials contributes to the improved profitability of production of exchange goods in Ukraine.
The recovery of global consumption and prices for dairy products creates favorable conditions for Ukraine to increase its export of exchange goods. In particular, raw milk in Ukraine costs 25% less than in the EU. However, the increase in import volumes of cheeses affects the reduction in consumption of domestic producers' products on the internal market, which also restrains the growth of prices for raw milk. Cheese production requires significant volumes of milk, and a reduction in demand from cheesemakers leads to the emergence of surpluses on the market, which pressure prices. It is likely that there will be another reduction in prices for raw milk on those farms wh ere it costs more than 14 UAH/kg without VAT in early June. However, from the second half of July in Ukraine, prices for milk are likely to strengthen under the influence of summer heat. Purchase prices may align with European ones if Ukrainian exporters increase their deliveries of exchange goods to foreign markets.
Press Service of the Association of Milk Producers of Ukraine
23.09.2024
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