The selling prices for raw milk and its processed products in Russia remain at a stable level, despite the growth in production costs, the Ministry of Agriculture said. The ministry noted that the rise in prices is comparable to the level of inflation in the country. Earlier, dairy producers announced that they are planning to raise selling prices by the fall, as they do not cover the costs.
“This year, there is an increase in the cost of raw milk production due to the rise in the cost of feed, which accounts for 45% in the cost structure, as well as an increase in tariffs for energy resources, fuels and lubricants, and wages. At the same time, the selling prices for raw milk and processed products remain at a stable level – over the past year, their growth is comparable to the inflation rate, ”the Ministry of Agriculture said (quoted by Prime).
According to the Ministry of Agriculture, from January to May this year, milk production increased by 1.6% compared to the same period last year. The department expects further growth in production, so that by the end of the year the figure will be at least 32.6 million tons.
The Ministry of Agriculture recalled the measures taken earlier to reduce the costs of producers. We are talking about compensation for part of the costs of construction and modernization of livestock complexes, subsidies for milk production, grants to small businesses for the development of production, compensation for part of the costs of payment of investment loans received before 2017, export duties on milk powder and support for milk processing. Also, customs and tariff measures were introduced to regulate the grain market, which contributed to a decrease in the cost of feed, and livestock breeders can receive preferential short-term loans for veterinary drugs and feed, and preferential investment loans for the construction, reconstruction, and modernization of farms.
Earlier, the general director of the National Union of Milk Producers (Soyuzmoloko) Artem Belov told RBC that the rise in milk prices this year does not cover the growth in business costs for its production. The plans to raise prices were announced by the companies Molvest, A-Milk, and Ruzskoe Moloko.
For more information on the situation on the milk market, see the article by Kommersant “Milk is Condensed”.