Stefan Durr: I think we haven't reached the peak of raw milk prices yet

Источник: The DairyNews
Chairman of the Management Board of Soyuzmoloko, President of EkoNiva Group Stefan Durr, within the framework of the XIII Congress of the National Union of Milk Producers Soyuzmoloko, spoke about the problems faced by the dairy industry and about several possible ways to develop the sector, reports The DairyNews.

The speaker drew the attention of the audience to the fact that currently milk producers and processors need to build relationships in a different way.

Stefan Durr noted that 70% of EkoNiva's revenue is provided by milk. For all livestock farms, the speaker continued, at one time it became a problem to reduce livestock in order to optimize costs:

‘If we had all the support measures for the purchase of feed at the end of 2020, many things would probably develop differently. We need to think about how to restore the loss of livestock and preserve the animals that we have now,’ said Stefan Durr.

The price of raw milk, according to the speaker, is now more or less normal, and the market situation is developing in favor of producers:

‘Yes, in the autumn of 2020, the cost price has grown significantly; raw milk has gone up in price recently. I do not know whether it will last for a long time, I think we have not reached the peak of price growth yet. A similar situation was in 2017, prices were very high and I do not know which of the processors earned money in 2017. In 2018, it was the opposite: milk prices collapsed, producers had losses,’ the expert noted.

Stefan Dürr called on milk producers and processors to rebuild the system of interaction, as there are currently strong trends in the dairy industry that have already had an impact on poultry and pig farming:

‘We are now following the path that pig farmers have been following for a long time. There is already a very large concentration in their sector, a large level of integration in the industry, there are almost no independent meat processing plants left. This process is slow in our country, as the dairy industry requires large investments. However, today, for example, we are ready for multi-year contracts. Our task as a Union is to understand how to implement it, what indexes and conditions should be so that the entire industry can switch to such contracts.

One of the options for the development of the sector, in addition to switching to long-term contracts, according to the speaker, is vertical integration. The third option is the consolidation of milk producers, up to cooperation and the construction of their own processing enterprises. The fourth option is for processors, in which they themselves are looking for ways to provide themselves with raw materials.

Another challenge for the sector is the ESG agenda, the transition to which requires investments. Stefan Durr said that EkoNiva has to pay more than 100 million euros to make its milk carbon neutral. The speaker noted that the transition to ESG principles should be smooth and take into account the capabilities of enterprises.

‘The cost of milk production in Russia is quite high, unlike Western farmers. We have market opportunities like no one else, if we work normally, we will be able to produce milk at a lower cost and not only fulfill the Doctrine of Food Security, but also strengthen our positions on world markets,’ summed up Stefan Durr.


24.05.2024
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