During the first four months of the year, imports of dairy products increased by 23% in physical volume, in value terms the growth was 20%, according to Soyuzmoloko.
As follows from the FCS data, 62.7 thousand tons of condensed milk and cream were imported to Russia in January-April 2019. This is 21.9% more than a year earlier. The import of cheese and cottage cheese has increased by 14.9% to 84.5 thousand tons. The import of butter amounted to 39.7 thousand tons, having increased by 93.7%. All products have grown in value terms. At the same time, the import of palm oil for four months of the year amounted to 361.7 thousand tons (+7.9% in physical weight). In value terms, palm oil supplies to Russia decreased by 10.7% - the product fell in price.
Despite the rise in import prices, it is still profitable to import it. At the same time, we should not forget that the overwhelming volumes of dairy category from outside to Russia are Belarusian products which (especially in terms of finished dairy products) have high competitive advantages - although in this case it is worth talking about the low competitiveness of the Russian product in the first place.
If in 2018 milk imports were record low - just above 5 million tons, this year Russia imports it at a double rate. What does it mean? Is milk production stagnating? Just the other way around - in the sector of agricultural enterprises and farms growth in recent months compensates even the "official negative dynamics" of smallholders.
A serious factor in the lack of competitiveness of domestic dairy products remains the issue of logistics - the import of dairy products has increased, including the import from the countries of Latin America, which carry out logistics by sea, which is often quite profitable. Meanwhile, Russia has an inefficient monopoly on railway transportation - to deliver dairy products from Altai region to Moscow can be much more expensive than by sea from Argentina to St. Petersburg.
PRICE AND VOLUMES
The price of milk in the summer of 2019 in most farms remains well above the price of the same period in 2018. The price has not reached the peak of 2017. However, farmers are more concerned not about today, when the production of milk is all right, but about the consequences of weather anomalies for the autumn period - with the increase in the cost of feed the yield may decrease.
Milk processors note that 2019 will be a difficult year for the plants. The cost of raw milk will increase by 5-7% in Central Russia and by 10-15% in the East. This is due to the actions of regulators and the closure of our market for Belarusian companies. Despite the removal of sectoral restrictions, most of the Belarusian companies supplying raw materials are banned by the Rosselkhoznadzor.
Producers and processors do not expect a serious increase in milk production in the commodity sector.
The Ministry of agriculture is optimistic that Russia will be able to provide itself with milk for 7-8 years, but this statement does not take into account the weather factor, political and economic situation - a purely systematic build-up due to state support.
- In the dairy industry, there is a lag behind the values of food safety in milk, but the effective implementation of state support measures aimed at increasing productivity in dairy cattle breeding, technological modernization and improvement of breeding work, allowed to increase production of raw milk on farms of all categories in 2018 by 1.5% compared to the level of 2017, to 30.6 million tons. Maintenance of positive dynamics in this direction in the future will allow to achieve indicators of food security in milk over the next 7-8 years, - assured the Federal Agrarian Department.
This year, according to the Ministry of agriculture, the increase in production can reach 500 thousand tons. Where will millions of tons of milk delivered from Belarus to Russia be in 7-8 years? This of course is another question. The Union state is actively working to diversify exports. But no one except the United States (after the start of trade wars with China) could quickly redistribute a huge amount so far.
SUMMARY AND OPINIONS
The Ministry of agriculture said that the growth of imports is associated with an increase in consumption of dairy products in Russia - which since the beginning of the year has increased by slightly more than 1%. We will remind that over the last two years milk consumption in Russia per capita has been steadily declining. The growth of imports significantly exceeds the dynamics of consumption.
Meanwhile, in the first quarter of the year production of dry dairy products and butter in Russia decreased, production of milk and cream powder in Belarus decreased.
What should we expect in autumn? Analysts talk about the restoration of stocks, which the balancing of the market and the summer season contribute to, breeders fear a decrease in feed stocks - because where it is cold the right amount of feed will not ripen, and hot weather, if there is not enough moisture, again will allow to prepare forage insufficient in quality. In any case, you can survive in Russia almost everything except... the State and its changeable rules of the game.
Elena Stafeeva, Agricultural enterprise “Plamya” (Sverdlovsk region):
At the moment we have cool weather, very comfortable for animals. At night the temperature drops to 4°C.
Today's weather conditions are unfavorable for the growth of all cereals, legumes and other forage crops. Especially they are not good for maize. As always, it lags behind in growth. If this is not compensated by the subsequent heat, we will not get a yield of maize, which is grown only for silage. In general, this is a very typical situation for the Urals. We are trying to adapt.
The price of raw milk has already decreased, compared to May this year it has decreased by 30-40 kopecks. That is, the current basic price ranges from 22 to 23 rubles. The demand for milk is active, but buyers are not ready to add the price. At present the price is slightly higher than in the summer of 2018, when there was a serious drop. At the same time, in 2017, the basic price of milk (fat 3.4%, protein 3%) without VAT and transport costs was higher than the current one by 11%.
John Kopiski, LLC "Rozhdestvo" (Vladimir region)
We have hot weather. And if it does not affect the animals yet, it has a very strong impact on the state of forage crops, which will eventually affect the cost of feed. Now we are fulfilling the plan, and we do not know what will happen next. If it does not rain in the next 2-3 weeks, it will be a very big problem, the problem with feed and their cost. And then there will be a problem with milk, with the quantity and quality.
We have signed a contract for the supply of raw milk for a year. Now the price has slightly decreased. Since we have a large tech production, now the daily milk yield per cow is 32 l. We actually get 28 rubles for raw milk; I would like to add 2 rubles. But that's not the point now. The most important thing is the cost of the diet and what the price for feed will be in autumn.
Anatoly Murashkin, Krasnodar region - Federal state unitary enterprise “Urupskoye" (Krasnodar region)
We have traditionally hot weather in this period of the year, but using various tricks, modern technology, we cope with this situation. The production process is not affected by weather conditions - it is stable. Despite the fact that now we have a lot of dry cows, we have kept the gross production at the necessary level.
From processors there were attempts to reduce the price. But they were not successful. And we have no expectations of price reduction in the summer. As there are no additional volumes of milk that significantly distinguish summer from winter. The spring-summer period does not affect production - there is no seasonality in the industry, at least in our area.
Mikhail Mishchenko, Director of the Russian Dairy Research Center (DIA)
- In the Russian Dairy Research Center we were repeatedly talking that the import substitution declared by the Government didn't take place. Last year for the dairy industry was characterized by the fact that imports grew slightly, but the supply of vegetable oils seriously increased - this is also an indicator of the situation on the market. At the same time, imports of skimmed milk powder decreased, which was due to the large reserves in Russia at that time.
Today, Russia is buying again and in significant volumes. This suggests that the populist policy of import substitution does not work. It does not work for the simple reason that the development of small and medium-sized businesses does not occur. Business constantly faces administrative barriers, such as "Mercury".
Now the state, realizing that import substitution cannot be implemented, decided to support the largest producers to let them export.
In my opinion, this decision will lead to nothing again. Today, a long-term plan is put in place, budgets are allocated for it. And the real basis for the development of the industry is not created.
A system of animal registration should be created, the development of small and medium-sized enterprises should be stimulated, effective demand should be created, and the taxation of small businesses should be reduced. Unfortunately, the state has other priorities.
There is also a positive moment - we see an increase in the production of raw milk.
However, the price of raw milk is still very high; we cannot make competitive products from such expensive raw materials. Why do we have expensive milk? First of all, this is a feature of state support. Often, the state supports inefficient enterprises, does not stimulate the development of banking systems that could allow lending to small and medium-sized businesses