Raw milk price: market expectations

World draught and fast growth rates in milk consumption in emerging countries had a certain impact on the Russian dairy market, experts say.

World draught and fast growth rates in milk consumption in emerging countries had a certain impact on the Russian dairy market, experts say. At the moment dairy processing enterprises register unusual for this period raw milk price growth and expect 2007 situation repetition, when a small deficit provoked a significant price growth.

According to the Russian Ministry of Agriculture, as of 16 March 2013 an average raw milk purchase price reached 19.55 Russian rubles (Central Federal District – 13.62 RUB, Far Eastern Federal District - 26.83 RUB).          

Some market representatives link price growth to cattle population decrease in some Russian regions, absence of adequate strategy of sector development. Alexander Kremnev, head of a dairy plant “Lebedyanskiy” in Lipetsk Region believes, that if the raw milk price doesn’t drop by May, it probably won’t drop by the end of the year. He points out that in the Lipetsk Region the dairy cattle population is stable; the raw milk purchase price in the region is 15 rubles.

Late spring, slow milk production growth (-12% vs 2012), unusually small for this period of time volumes of milk powder and butter supplies from New Zealand (due to draught), sustained spring in Belarus also influence Russian market, added Alexander Kremnev.

Alexander Nikitin, Alantal Group of Companies Board Chairman, compared the current situation on the Russian dairy market with 2007. He believes it’s a result of a heavy overproduction in the world. As soon as a very small deficit occurs – a price jump follows it, he added.

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30.01.2024
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