Alexey Gruzdev: the demand for raw milk pulls up the purchase prices

Источник: The DairyNews
This opinion was expressed by the representative of Soyuzmoloko during agro festival AgroPro-2019, held in Izhevsk on August 9-10, was told to The DairyNews in the regional Ministry of agriculture.

During the round table experts discussed the prospects of the dairy industry in Russia and Udmurtia.

As noted by the representative of SOYUZMOLOKO Alexey Gruzdev, the volume of production of commercial milk in Russia, despite concerns about last year's price fluctuations, continue to grow steadily. 2018 gave an increase of 2.3% to the level of 2017. Udmurtia has maintained its position in the TOP of Russia in terms of production dynamics – it produced 781.3 thousand tons of milk, plus 2.4% to the level of 2017.

Due to the strong trends that are now present in the market, the demand for raw milk is growing, pulling up the purchase prices. Among them the expert noted the reduction in the consumption of milk powder, the rejection of substitutes and the transition to real raw milk in the production of cheese. There was a slight increase in income of population, which in turn spurred the growth of consumption of key dairy products. The demand for drinking milk, cheeses and cottage cheese is growing. All this is the driver of further growth in demand for raw materials.

"In the first half of this year Udmurtia has added almost as much as Tatarstan. And this is a phenomenal picture: the scale of production in the neighboring region is incomparable. And the growth almost reached the result of Kirov region. At the same time, today the purchase price of milk in Udmurtia is higher than in these regions", according to independent assessment of Alexey Gruzdev.

The next beneficial difference, he said, is the existing "greenhouse" conditions for the development of dairy farms: in the Republic there are two large processors included in the TOP 5 of Russia, and they are constantly increasing their processing capacity.

Further work on improving the efficiency of production is the main appeal, which was sent to the hall. After all, the purchase price remains a market factor. It is the price trend, according to Alexey Gruzdev, that was the biggest surprise today in the dairy market of the country. The purchase price of milk has not only stabilized and is higher than last year – this summer there is no traditional seasonal decline. In June-July, it even exceeded the level of 2017. "But this factor raises some concerns for the second half of the year – the analysts' forecast is ambiguous", he said.

The first scenario is optimistic. If the income of the population and the demand for dairy products remain stable, then the market situation will be favorable for producers. The price corridor will remain the same – for Russia 24-24.50 rubles/kg, for Udmurtia – 22-22.50 rubles/kg.

The second scenario is realistic. In the world market there was an imbalance in the price of butter – it became pretty much cheaper, especially in New Zealand. Belarus reacts to such changes quite quickly. As for butter, we can expect a serious increase in imports. Plus cheese production – most of the products produced in the 1st half of the year just went to the warehouse.

"Nevertheless, the price adjustment is likely to be down rather than up. In Russia, we focus on the figure of 23.50-24 rubles/kg, in Udmurtia – 21-22 rubles/kg", - concluded Alexey Gruzdev.

As noted by the Minister of agriculture and food of the Udmurt Republic Olga Abramova, to improve the efficiency of production and profitability of farms a number of measures is laid in the Concept of development of the dairy industry until 2030. Including the opening of specialized production sites (calf villages, fattening farms, etc.), the organization of service feed center, the development of cooperation in the field of dairy farming. "These are the promising reserves of our growth that need to be used", concluded the Minister.

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