Currency fluctuations: the opinions of the participants of the dairy market

Источник: The DairyNews
The growth of the dollar and the euro rate against the national currency of the Russian Federation during the last few weeks will unlikely worsen the situation of the dairy industry, however, it can have a lasting impact. The DairyNews talked to a number of market participants most of whom admitted that the dairy industry is highly dependent on imported components and equipment, which often have to be purchased not for rubles.
Since the end of February till the first decade of April, the rate of the dollar to the ruble increased by 7-8 rubles. The euro grew by almost 10 rubles.

The declining rate of the ruble will affect the growth of prices, but not sharply. Analysts believe that in general on the market it will be no more than 1%. On the whole at the beginning of April, retailers said there was no increase in prices from suppliers.

Maxim Semka, Deputy Director of the work-study farm “Krasnodarskoe”
– Changes in the exchange rate will entail negative changes in the dairy sector, especially taking into account the latest trends in the price of milk. Currently, a significant amount of feed, vitamins and feed additives is purchased for foreign currency, because they are imported. With the growth of the euro and the dollar rate imported components will increase the cost of milk production, a significant contribution to which is made by feed. To which extent Russia is dependent on imports and how much normal milk the country lacks – these are different issues. If today you come into any shop, you can see absolutely any product of domestic production on shelves. Another thing is what this product is made of. In this case, it is necessary to understand that on the counter there can be products made of imported milk powder, made of natural domestic milk, and falsified products. It is necessary to develop animal husbandry to produce enough raw milk in our country – then there will be no need for imported milk powder.

Ivan Yashnov, Altai regional state unitary enterprise “Biyskoe”
– The state of the dairy industry is affected not only by the rate of the dollar and the euro. In fact, the second half of 2017 was a failure, the price for one kilogram of milk in summer was 22 rubles, with this price we entered the winter of 2018. Since the first of January the price began to fall and at the moment it makes 18 rubles. The difference with last year's price of milk is in the range of 6-7 rubles. We produce a little, within 600 tons of milk per month, but even with this amount we receive less by at least 3.5-4 million rubles. Meanwhile, retail prices for milk in the store remained at the same level, and somewhere increased a little, while milk producers suffer losses.

In any case, Russia won’t be able to do without the import of dairy products, because we have a deficit for raw milk, we are still completely unable to provide ourselves. At the same time, the attitude to domestic manufacturer is neglectful, to put it mildly.

Konstantin Sukharev, General Director of LLC “Pyatigorskiy dairy plant”
– Now, when the price of raw materials is falling, I do not think that the growth of the euro and the dollar will have a strong impact on dairy production. In the future, when there is an increase in prices for raw materials, there will be an increase in the cost of products as all equipment and spare parts the enterprises have are imported. We are 100% import-dependent – we even import seeds.

Vladimir Zhiltsov, Director of "Breeding farm “Collective farm named after the 50th anniversary of the USSR»
– The situation should be looked at more broadly: the price of raw milk has fallen significantly even before the last currency fluctuations. Incoming raw materials - vitamin supplements, premixes - have risen in price by 30-60% since the beginning of a new year. With the weakening of the ruble there will begin another round of prices. The question on the dairy market is an edge: milk costs less and less and feed prices are rising at a shocking pace.

The share of imports in the domestic dairy industry is huge. Import of high-quality and low-quality milk powder, butter is large-scale. There is no control from the relevant authorities. Some time ago, the media reported that import from Belarus would be stopped. But nothing has changed – there was just created a stir that does harm primarily to milk producers. In the end, all the consequences affect us. We are making efforts to stop the ongoing weakening of milk position throughout the country. There are a lot of examples where producers are selling milk at 8-10 rubles, only to be able to milk cows tomorrow. The situation is very complicated and without the support from the Government it will only get worse.

Nickolay Somov, Director of LLC “Radna”
– It is obvious that all changes in the exchange rate have a direct impact on the dairy market, now there are objective changes for the worse. In particular, the cost of premixes increased due to the increase in the cost of imported ingredients – vitamins A and E. The price of imported additives, meal, canola has increased multiple. So, six months ago, sunflower meal cost twice as cheap. Domestic milk producers are particularly dependent on imports in terms of technology. All large farms and high-tech complexes are equipped with imported equipment, for example, milking parlors. And foreign currency changes increase the cost of maintenance supplies by 1.5-2 times. All these factors make the cost of milk production higher by 30-35%.

Read full article in Russian on DairyNews.ru
30.01.2024
В России наметилась устойчивая тенденция сокращения поголовья коров: их количество снижается ежегодно, а в 2023 году достигло исторического минимума. The DairyNews обсудил с экспертами отрасли причины уменьшения молочного стада в России. Участники рынка поделились мнением о происходящем и рассказали, как избежать катастрофических последствий для производства молока, молочных продуктов и говядины.
Читать полностью