Growth in milk production slowed down in

The growth rate of milk production in the Russian Federation has recently seriously slowed down. The National Union of Milk Producers (Soyuzmoloko) believes that the indicator of the Food Security Doctrine for milk will not improve this year.

According to the doctrine, self-sufficiency in milk should be at least 90%.

“We are already noticing a serious slowdown in the growth of marketable milk production. If during previous years we grew by an average of 1 million tons, or about 4-5% per year, then this year we expect an increase in a good development scenario of no more than 1%, and most likely it will be about 0.5 -0.7%, or about 150,000 tons of marketable milk,” said Aleksey Voronin, DIRECTOR of the union's analytics department, at a press conference on Wednesday.

“The other day, Rosstat published data for nine months of this year on the volume of production of all raw milk, taking into account the non-commodity sector, and there has already been a decrease. Accordingly, in the commodity sector, we still expect a slight increase, but this increase will not be comparable with the levels of previous years,” he said.

According to Voronin, this is primarily due to the fact that agricultural producers "have lost a lot in profitability." “And it turns out that for economic reasons, someone is forced to either go into crop production, or even out of the agricultural sector, slaughtering livestock. And this year, the rate of decline in livestock has already accelerated, amounting to about 1.7%. In recent years, this is probably one of the highest rates,” he said.

Voronin also drew attention to the fact that due to the increase in feed prices, the cost of animal rations is being optimized, which leads to a deterioration in their nutritional value. “This leads to a decrease in milk production. And the impact of this factor is not momentary, it will be long-term and will still affect the industry in the coming years,” he predicts.

“Thus, we have actually slowed down the accelerating pace of reaching the level of food security, and this year we are unlikely to increase our food independence compared to the previous year. And the share of imports in the market will probably remain at the level of about 16%, as it was in the past year,” Voronin said.

According to a representative of the union, the increase in the cost of production in milk processing compared to the pre-pandemic 2019 year was 14-16%, depending on the category of dairy products. At the same time, the increase in retail prices for dairy products over the same period amounted to about 10%. “Absolutely all cost items for operating costs have grown. It all started with the devaluation of the ruble in March 2020, and in the dairy category from 15% to 30% are foreign exchange costs. This was followed by a serious increase in prices for compound feed and for other categories of feed, primarily for high-energy high-protein feed - these are meal and cake, - he explained. - Plus, the cost of attracted labor resources has increased significantly. Rising prices for electricity, for diesel fuel, in fact, for all items of operating costs”.

According to Voronin, import volumes remain "plus or minus at the level of about 7 million tons, respectively, about 16% of domestic consumption last year."

He called EXPORT growth rates “quite good - about 20-25% on average over the past two or three years.” “And this year, most likely, in milk equivalent, the volume of exports will exceed 1 million tons,” Voronin predicts, recalling that “just three or four years ago, exports amounted to about 600 thousand tons.”

finmarket.ru