According to ACCOR, local dairy processors have already reduced purchase prices several times since the beginning of the year. The Pushkinogorsk dairy plant announced a halt on milk purchases from farmers due to overstocking.
“How should we act in a situation like this: slaughter cattle or pour out milk? For now, we’ve been simply supplying milk to those who take it for free,” said Vladimir Korobetsky, head of the farm holding.
He said that farmers are willing to start processing their products, but it involves a number of bureaucratic procedures in the first place. On the other hand, there is the issue of selling goods. It is extremely difficult for a small farming business to contract with retail chains.
According to ACCOR, the current situation is observed all over the North-West region. In the Leningrad region, the purchase prices for milk have fallen by 25%. The Porkhovskiy Maslosyrzavod, the largest dairy plant in the region, said it won’t be able to pay for milk supplies but is willing to take them for free. “Farmers are collecting past-due debts for milk supplies, which amount to 1.5-12 million rubles for the region,” says ACCOR. The association believes the farmers won’t hold out for long.
The association considers it necessary to enhance control measures over the presence of vegetable fats in dairy products. Besides that, ACCOR stands for checking processing plants for purchases of milk powder and palm oil. The association doesn’t rule out the possibility of a ban on dried milk imports being introduced as a timely measure.
Lyudmila Manitskaya, the director of the Dairy Union of Russia, has previously given a comment to Veterinary Medicine and Life on the current situation in the milk market. She called the decrease in purchase prices for milk a natural process. According to her, the cost of products can’t be at a constant growth rate, taking into account the lowering demand resulting from consumer income reduction.
“For three years, the purchase prices for milk didn’t go low, even in the summer. They were just going up. This was due to the pandemic. But for some reason, farmers expected this process to last forever. The average purchase price for milk in Europe stands at $0,35, which is approximately 24-25 rubles. And prices for high-quality milk reached 50 rubles here. But currently, people have less money. At the same time, milk consumption has decreased by 20-30% since October 2022. However, this didn’t stop our livestock farmers. And the last increase in purchase prices for milk was seen in December 2022. By that time, milk processing companies had stocks of high-margin products, such as butter and cheese. Which, obviously, had the current situation as a result,” said Lyudmila Manitskaya.
According to her, a decline in purchase prices was forecast even in 2022.
The Ministry of Agriculture is developing support measures for the dairy market. This was announced on Wednesday by Oksana Luth, First Deputy Minister of Agriculture, during a meeting in support of small businesses in Udmurtia. “We will reduce oversupply; now we’ll intensify exports, as our milk is needed abroad, especially dried milk. We will introduce additional measures in this area to be able to deliver products and to make our milk competitive in foreign markets. Such are the plans”, Interfax cited Oksana Luth as saying in a statement.
