Milk production rose in price by 18%

The cost of raw milk production this spring was 18% higher than a year earlier, the producers complain. But so far, this has not affected either sales or retail prices.

The materials of the National Union of Milk Producers (Soyuzmoloko) show a significant increase in the cost of raw milk production. According to their calculations, in March 2021, the cost of milk production was 18.2% higher than in March 2020. Artem Belov, CEO of the Union says that the main reasons for this are the rise in the price of feed, breeding material, equipment and spare parts and veterinary drugs.

The cost of production of raw milk increased in 2021 by 20-30% compared to last year, estimates Dmitry Matveev, president of the agricultural holding Kabosh (one of the ten largest producers of raw milk in Russia and produces more than 20 varieties of traditional cheese). According to Matveev, the increased cost of production was also influenced by the decline in the ruble against the dollar and the euro. Last year, animal feed rose in price by 30%, says the president of Kabosh. The cost of feed increased by 3 rubles per 1 kg, while the sale price of raw milk increased only by 0.5-1 rubles, confirms the president of the agricultural holding Ekoniva Stefan Durr.

Milk producers and processors are now working in conditions of ‘a significant increase in the costs of veterinary medicines, logistics, electricity, packaging and other components of the cost price,’ admits the representative of the Ministry of Agriculture. According to him, customs and tariff measures to regulate the grain market will help reduce the cost of feed and reduce the costs of milk producers.

The industry union presents the average cost of raw milk only by the results of February this year: this month it was 29.5 rubles (without VAT) per 1 kg, which is only 3.6% higher than in February 2020. The Ministry of Agriculture has data for April 21, 2021: the sale price of raw milk from agricultural producers was 26.6 rubles per 1 kg, which is 4.1% more than a year earlier.

If the real increase in the cost of raw milk was taken into account during the production of finished dairy products, the cost of finished dairy products would increase by 13-16%, follows from the materials of Soyuzmoloko.

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