El Niño Threatens to Drive Up Milk Prices Amid Fodder Shortage Concerns
Milk prices, already increased by major dairy companies by 2-3% in May, may experience another hike by July or August if El Niño conditions persist and monsoon rains are insufficient. According to industry executives, reduced rainfall often leads to fodder and water shortages, prompting farmers to cut down on cattle, subsequently decreasing milk output and increasing prices.
Parag Milk Foods' chairman, Devendra Shah, confirmed a recent price rise of around 2-3%, adding that a further 3-4% increase might be necessary if key milk-producing areas receive below-normal rainfall. Shah's comments highlight the potential impact of adverse weather conditions on the dairy sector.
Fodder Concerns and Government Response
The Maharashtra government has urged farmers to boost fodder production amid fears of a shortage. Animal husbandry commissioner Kiran Patil emphasized the possibility of a fodder shortage due to El Niño and advised livestock farmers to plan for fodder crops. Several dairy companies are collaborating with cattle owners on fodder management to minimize any negative effects.
Monitoring and Mitigation Efforts by Dairy Companies
Major dairies are closely monitoring the situation. Amul, for instance, is waiting to see the monsoon's progress before deciding on further price changes. Jayen Mehta, managing director of the Gujarat Cooperative Milk Marketing Federation (GCMMF), noted that El Niño currently has no immediate impact on milk availability, although deficient rainfall typically affects specific regions rather than the entire country.
Mother Dairy is also tracking climatic conditions across its procurement network, with managing director Jayatheertha Chary stating that the company is preparing necessary mitigation measures.
Recent Price Increases and Regional Impacts
This cautionary stance comes after Amul and Mother Dairy raised milk prices by Rs 2 per litre in May, citing higher procurement, cattle feed, packaging, and fuel costs. Amul reported a price increase of about 2.5-3.5% per litre, while Mother Dairy noted a 6% rise in procurement prices over the past year.
The heatwave in Tamil Nadu has also affected milk production, leading the state-run dairy brand Aavin to reduce supplies.
