Russian Dairy Industry Sees Moderate Growth in First Half of 2024, Led by Key Segments
Source: DairyNews.today
In the first half of 2024, Russia's raw milk production grew by 3% to reach 13.2 million tonnes, according to a report from Soyuzmoloko, a leading Russian dairy industry association. This moderate growth reflects a broader upward trend across most segments of the Russian dairy market, which had previously shown mixed results.
Segment Growth Highlights
The report highlights notable increases in specific dairy product categories. Cream production surged by 23% to 146,500 tonnes, while cottage cheese output rose by 9% to 334,500 tonnes. Yogurt production also saw double-digit growth, climbing by 13% to 330,600 tonnes, and the ice cream sector expanded by 14%, reaching 260,300 tonnes.
Modest growth was recorded in other categories: sour cream production grew by 2% to 242,900 tonnes, kefir production by 1% to 400,400 tonnes, and cheese products saw a 1% increase to 85,000 tonnes. These figures indicate a consistent, if moderate, growth trend for the Russian dairy industry across various product lines.
Price Stability and Inflation
Soyuzmoloko's general director, Artem Belov, noted that the stability in raw milk prices throughout 2023 was instrumental in supporting the dairy industry. While other food items contributed to inflation—such as eggs, which saw prices jump by 61.4%—dairy products have been among the few to help mitigate rising food costs. By mid-2024, raw milk production had already grown nearly 4%, with dairy product prices generally trending upwards.
Financial Performance and Market Leadership
The financial health of the Russian dairy sector also appears strong. In 2023, the top 30 Russian dairy producers collectively generated RUB 857 billion (approximately US$9.44 billion) in net profit, reflecting a 10.1% increase from the previous year. Wimm-Bill-Dann emerged as the new market leader, with revenue reaching RUB 136.7 billion (US$1.51 billion). This development comes amid changes within the industry following the deconsolidation of Danone’s former Russian business, Health & Nutrition, which has impacted market dynamics.
While the dairy sector is performing robustly, the Russian Agricultural Ministry recently cautioned that the profitability across agricultural sectors is nearing levels that could discourage future investment. However, the dairy industry remains a bright spot, outpacing other segments in terms of growth and profitability, positioning it as a key contributor to the agricultural economy in 2024.
The report highlights notable increases in specific dairy product categories. Cream production surged by 23% to 146,500 tonnes, while cottage cheese output rose by 9% to 334,500 tonnes. Yogurt production also saw double-digit growth, climbing by 13% to 330,600 tonnes, and the ice cream sector expanded by 14%, reaching 260,300 tonnes.
Modest growth was recorded in other categories: sour cream production grew by 2% to 242,900 tonnes, kefir production by 1% to 400,400 tonnes, and cheese products saw a 1% increase to 85,000 tonnes. These figures indicate a consistent, if moderate, growth trend for the Russian dairy industry across various product lines.
Price Stability and Inflation
Soyuzmoloko's general director, Artem Belov, noted that the stability in raw milk prices throughout 2023 was instrumental in supporting the dairy industry. While other food items contributed to inflation—such as eggs, which saw prices jump by 61.4%—dairy products have been among the few to help mitigate rising food costs. By mid-2024, raw milk production had already grown nearly 4%, with dairy product prices generally trending upwards.
Financial Performance and Market Leadership
The financial health of the Russian dairy sector also appears strong. In 2023, the top 30 Russian dairy producers collectively generated RUB 857 billion (approximately US$9.44 billion) in net profit, reflecting a 10.1% increase from the previous year. Wimm-Bill-Dann emerged as the new market leader, with revenue reaching RUB 136.7 billion (US$1.51 billion). This development comes amid changes within the industry following the deconsolidation of Danone’s former Russian business, Health & Nutrition, which has impacted market dynamics.
While the dairy sector is performing robustly, the Russian Agricultural Ministry recently cautioned that the profitability across agricultural sectors is nearing levels that could discourage future investment. However, the dairy industry remains a bright spot, outpacing other segments in terms of growth and profitability, positioning it as a key contributor to the agricultural economy in 2024.