The increase in prices for raw milk has halted, according to the Association of Milk Producers of Ukraine
Source: The DairyNews
As of February 20, 2024, the average price of raw milk was 14.19 UAH and has not changed since the preliminary monitoring at the beginning of the month. Over the last month, the price has decreased by 13 kopecks.
Procurement prices remain stable after a certain decrease in January due to a slowdown in demand for dairy products during the New Year holidays. A further decline in raw milk prices by the second half of March is unlikely due to political and macroeconomic factors, as reported by the analyst of the Association of Milk Producers, Georgiy Kukhaleishvili.
The average procurement price of extra-grade milk as of February 20 was 14.50 UAH/kg without VAT, which is 20 kopecks higher than in the second half of January. The price range for this grade on farms varies from 14.00 to 15.00 UAH/kg without VAT. The lower and upper bounds of the price range have not changed, and the upper has decreased by 20 kopecks in the last month.
The highest grade averages 14.50 UAH/kg without VAT. In the last month, the price for this grade has dropped by 20 kopecks. Prices for the highest-grade milk fluctuate between 14.00 and 15.00 UAH/kg without VAT. The lower bound of the price range has not changed, while the upper has decreased by 20 kopecks compared to the second half of January.
The average price for first-grade milk was 13.57 UAH/kg without VAT and has not changed in the last month. The minimum price on farms was 13.00 UAH/kg, and the maximum price was 14.28 UAH/kg. The lower and upper price ranges have not changed in the last month.
Therefore, the weighted average price of the three grades was 14.19 UAH/kg without VAT, decreasing by 13 kopecks compared to January 20. Compared to the monitoring results conducted in early February, price levels remained unchanged.
Georgiy Kukhaleishvili suggests that dairy processing companies are refraining from revising raw milk prices downward due to the Ukrainian government's plans to impose a ban on the import of agricultural products from Poland, amid the uncooperative behavior of Polish farmers. Poles are blocking the transit of road transport across the state border, causing harm to Ukrainian exporters. Polish dairy products, including cheeses, may be subject to the ban. One of the reasons for the certain decrease in procurement prices for milk in Ukraine in January was the excessive supply of imported cheeses in the country. The decline in sales of domestic cheeses in February in the domestic market due to high prices did not contribute to an increase in demand for raw milk from dairy processing enterprises and an increase in procurement prices.
It is likely that the ban on Polish dairy products will lead to the elimination of excess ready-made products and contribute to an increase in demand for raw milk from processors who meet the needs of the domestic market. Moreover, during the Pancake Week in Ukraine, the consumption of dairy products traditionally increases. Most likely, raw milk prices will remain stable until the second half of March.
A review of procurement prices by dairy processing companies towards a decrease may occur in late March to early April during the season of abundant milk and increased lactation in cows. However, a significant drop in prices is unlikely this year due to the reduction in the supply of raw milk worldwide in 2023. Processors are not in a hurry to lower the price of raw milk amid rising export prices for butter and monitoring the increase in exchange goods for four consecutive GDT trading sessions since the beginning of the year.
The average procurement price of extra-grade milk as of February 20 was 14.50 UAH/kg without VAT, which is 20 kopecks higher than in the second half of January. The price range for this grade on farms varies from 14.00 to 15.00 UAH/kg without VAT. The lower and upper bounds of the price range have not changed, and the upper has decreased by 20 kopecks in the last month.
The highest grade averages 14.50 UAH/kg without VAT. In the last month, the price for this grade has dropped by 20 kopecks. Prices for the highest-grade milk fluctuate between 14.00 and 15.00 UAH/kg without VAT. The lower bound of the price range has not changed, while the upper has decreased by 20 kopecks compared to the second half of January.
The average price for first-grade milk was 13.57 UAH/kg without VAT and has not changed in the last month. The minimum price on farms was 13.00 UAH/kg, and the maximum price was 14.28 UAH/kg. The lower and upper price ranges have not changed in the last month.
Therefore, the weighted average price of the three grades was 14.19 UAH/kg without VAT, decreasing by 13 kopecks compared to January 20. Compared to the monitoring results conducted in early February, price levels remained unchanged.
Georgiy Kukhaleishvili suggests that dairy processing companies are refraining from revising raw milk prices downward due to the Ukrainian government's plans to impose a ban on the import of agricultural products from Poland, amid the uncooperative behavior of Polish farmers. Poles are blocking the transit of road transport across the state border, causing harm to Ukrainian exporters. Polish dairy products, including cheeses, may be subject to the ban. One of the reasons for the certain decrease in procurement prices for milk in Ukraine in January was the excessive supply of imported cheeses in the country. The decline in sales of domestic cheeses in February in the domestic market due to high prices did not contribute to an increase in demand for raw milk from dairy processing enterprises and an increase in procurement prices.
It is likely that the ban on Polish dairy products will lead to the elimination of excess ready-made products and contribute to an increase in demand for raw milk from processors who meet the needs of the domestic market. Moreover, during the Pancake Week in Ukraine, the consumption of dairy products traditionally increases. Most likely, raw milk prices will remain stable until the second half of March.
A review of procurement prices by dairy processing companies towards a decrease may occur in late March to early April during the season of abundant milk and increased lactation in cows. However, a significant drop in prices is unlikely this year due to the reduction in the supply of raw milk worldwide in 2023. Processors are not in a hurry to lower the price of raw milk amid rising export prices for butter and monitoring the increase in exchange goods for four consecutive GDT trading sessions since the beginning of the year.
