“Together we can create a powerful impetus for the Kazakh dairy industry to become a leader in the region” - Danone Central Asia and the Caucasus

“Today Kazakhstan produces less than 4 million tons of commercial milk. In 2022, there was a decline in volumes of approximately 5-8%. Imports occupy a significant share of the Kazakhstan milk market. One of the main factors hindering the development of the dairy industry is the low quality of raw milk. According to the Dairy Union of Kazakhstan, more than half of the commercial milk produced in the country does not meet the requirements of the technical regulations of the Eurasian Economic Union,” Azamat Romazanov began his report.

This situation in the dairy industry of Kazakhstan , notes a Danone representative, has developed because 73% of all marketable milk is produced by private farms and only 27% by organized farms. Dairy enterprises in Kazakhstan do not have sufficient quantities of high-quality raw milk for production. Processing enterprises are operating at only 60-70% of their capacity. The shortage of quality milk creates high prices for raw materials and volatility. There is also uncertainty in the market due to the entry into force of the EAEU requirements. All this ultimately creates risks for the health of consumers, the expert is sure.

In 2025, the Technical Conditions of the Eurasian Economic Union for milk will come into force in Kazakhstan. And 50% of commercial milk cannot be delivered to the enterprise. This will have a huge economic and social impact.

As for the situation on the dairy market of the Russian Federation, last year there was a decrease in the consumption of dairy products by approximately 12-20%. Many dairy enterprises have reduced their capacity, which has led to a decrease in the consumption of raw milk by enterprises. Now raw milk from Russia comes to the northern region of Kazakhstan and competes with local farmers, and raw milk from Russia has a lower price.

This situation, according to the expert, even if short-term, could lead to a decrease in the number of cows in Kazakhstan, since private farms do not have financial reserves to solve even short-term problems. Poor milk quality also affects yields. In Kazakhstan, the average cow produces 2.8 tons of milk per year, while in the USA a cow produces 9.5 tons, in the Russian Federation - 6 tons per year.

The lack of high-quality raw milk prevents Danone from producing a variety of cheeses, yoghurts and other high-value-added products.

Causes of the problem

“As we have already said, the main reason is the small number of organized farms in Kazakhstan. In Europe, one organized farm houses more than 1,200 cows. This amount ensures stable milk production. We don’t have even 10 farms in Kazakhstan with more than 600 cows,” noted Azamat Romazanov.

Factors why the number of organized farms is slowly growing:

· There are no qualified specialists: agricultural managers, agronomists, technical specialists, etc. These specialists are crucial for organized farming.

· Low quality of feed and lack of stability in the supply of feed to the market.

· Long period of return on investment. In Kazakhstan, it takes 12-15 years to return investment to start an organized farm. For example, in the USA this period is 8 years.

· There is a shortage of agricultural laboratories to select the optimal feeding plan for cows.

What to do about it

Kazakhstan has a “road map” for the development of the dairy industry until 2025. “Today is a good time to review it. Analyze which items are working well and which items need to be updated for them to work well. And this revision should be the result of cooperation between farmers, milk producers, the government and experts,” says Azamat Romazanov.

For its part, Danone is also taking action to support farmers. For example, interest-free loans for up to 1 year for the development of farmers. This year the company will launch a Dairy University program for those farmers who strive to supply high quality milk. This program will involve sharing Danone's experience with farmers in the treatment and feeding of cows to produce high quality milk.

Supporting enterprises and companies that already export dairy products to Kazakhstan is also important to expand export opportunities.

“Together we can create a powerful impetus for the Kazakh dairy industry to become a leader in the region. And this is a good time to make this impulse,” summed up the director for government and public relations at Danone Central Asia and the Caucasus.

The I International Conference AqAltyn - Dairy Industry of Kazakhstan will be held on November 28, 2023 in Turkestan, Kazakhstan.

General partner: Clever Machines

Technology partner: Kieselmann

Altyn Sponsor: Borte Engineering

Altyn Sponsor: ANR Engineering

Altyn Sponsor: Aseptic Packaging

Official partners: National Chamber of Entrepreneurs of the Republic of Kazakhstan "Atameken ", Dairy Union of Kazakhstan , Republican Chamber of Dairy and Combined Breeds of Cattle , FRANCE GROUP

Sponsor: Tauras-Fenix