Dmitry Matveev: The increase in the cost of production and processing of milk is 20-40%
At the beginning of his speech, Dmitry Matveev reminded that the Group of companies Kabosh is a vertically integrated holding company, and crop production, milk production and processing should be regarded as different industries:
‘Everything is fine in crop production, it largely depends on the company itself. As for milk, we see that the cost price has increased from 20 to 40%. In addition, if in crop production producers can form prices based on the market, we do not have such an opportunity, because our main buyers are retail chains.
The fact that at least 50% of production and processing is a currency component also plays a role. This includes equipment, fertilizers, and soybean meal, Dmitry Matveev added.
One of the trends of 2021 was the desire of the state to regulate actively pricing policy. The regulation, the expert noted, goes in two directions: this is the pressure on retail chains by the administrative resource and the pressure on the ground.
Speaking about the prospects and plans for 2022, the speaker noted that in 2022 the company will spend more on internal optimization. One of the challenges of 2021, with the next round of the pandemic, was interruptions in the supply of feed - this factor had a strong impact on milk production: compared to 2020, the holding will receive about 3% less milk.
Speaking about processing, Dmitry Matveev stressed that in order to assess the prospects, it is necessary to divide dairy products, cheeses and powdered products:
‘Speaking of powdered products, everything is fine with this segment, we see an export request. I do not think there will be an increase in whole milk products – I think, there will be a decrease in demand, including due to the growth of the plant-based category. As for cheeses, hard and semi-hard cheeses will grow in production. Now the category of fresh cheeses is seriously developing, because they are easier to produce. The segment of hard cheeses is also attractive, but for hard cheeses, a higher quality of milk is needed. In addition, in the case of hard cheeses, for example, we receive money for them only after a year.
Speaking about the prices of raw milk, the speaker noted that he does not share the optimism of some producers who are happy to be able to sell milk at higher prices:
‘Milk prices are rising, but I think it's bad. Unfortunately, wages and consumer capacity are not growing at such a pace. And it turns out that dairy products become like diamonds for some categories of citizens, people begin to look for a replacement for them without regard to quality. So I am wary of this issue.