What Are the Milk Production Volumes in Kazakhstan's Regions? Mikhail Mishchenko Presented Analytics at the "PRO Milk. Trends '24" Forum

Mishchenko began his presentation by analyzing food expenses, particularly dairy products, among Kazakhstan residents. He noted that the price of drinking milk in Kazakhstan increased by 44% in tenge and 45% in dollars in 2023 compared to 2022. This year, per capita consumption of dairy products stands at 238 kg, with the main reason for the decline in consumption being price increases. Mishchenko believes that the rising prices have negatively impacted the purchasing power of Kazakhstan's population.

"We observe a 15% increase in milk production volumes in agricultural organizations in Kazakhstan, a 4-5% increase among farmers and individual entrepreneurs, and a 9-10% increase in personal subsidiary plots. In absolute figures, this amounts to +80 thousand tons, +61 thousand tons, and +39 thousand tons, respectively. Despite significant state support for large-scale production, personal subsidiary plots have quietly increased their output by 39 thousand tons without any support. This situation is unusual. If we recalibrate, we see that the agricultural sector generates 120 million tenge, farmers and individual entrepreneurs generate 285 million tenge, and personal subsidiary plots nearly 1 trillion tenge. Unfortunately, no one sees this trillion tenge," Mishchenko highlighted.

Regarding milk production in Kazakhstan's regions, Mishchenko noted growth in almost all regions (excluding personal subsidiary plots). Reductions were only observed in Akmola and Zhambyl regions.

"Milk production in agricultural organizations across regions shows growth in most areas, with reductions in Akmola, Almaty, Karaganda, Zhambyl, and Atyrau regions. Milk production increased across the board for individual entrepreneurs. As previously mentioned, consumption has fallen everywhere. The largest decline occurred in Almaty region, which generates the highest demand, from 1,200,000 tons to approximately 960,000 tons. Western Kazakhstan also experienced a significant decrease," Mishchenko stated.

"In contrast, consumption growth was noted in two regions: Turkestan and Zhambyl regions, in southern Kazakhstan, indicating a slight shift in demand. Regarding production versus consumption, Kazakhstan currently has three surplus regions: Abay region, North Kazakhstan region – the most surplus region – and Ulytau region. Last year, we had two surplus regions; this year, we have three," Mishchenko explained.

Overall, milk production in Kazakhstan is growing, which is a positive trend for the raw milk production industry. However, Mishchenko pointed out issues with milk processing in the country.

"We counted 186 operating milk processing enterprises in Kazakhstan. Naturally, the regions with the highest milk consumption are Almaty region, Astana, and Akmola region, as well as the southern parts of Russia, Kyrgyzstan, Kazakhstan, and Turkestan. The region with the highest milk production and surplus is North Kazakhstan. Almost 90% of processing enterprises saw a significant reduction in revenue in 2023, leading to decreased milk processing volumes. We calculated the sales volume of dairy products in terms of raw milk across regions and for Kazakhstan as a whole. In 2023, the sales volume of dairy products in terms of raw milk was 3 million tons. This represents the amount processed and sold by dairy enterprises. We see a substantial decline in milk processing volumes in 2023 compared to 2022, driven by rising finished product prices and decreased purchasing power," Mishchenko concluded.