In the second half of the summer, the problems of dairy processors got worse, while for dairy farmes the situation improved even more than it was before.
The main reason for it is the same for both — the noticeable decrease in raw milk supply resulting in milk purchase price increase.
Dairies agree to buy milk at the price which is becomng higher and higher, although in summer even if milk production decreases there should be surpluses that must be exported. So, the problem arises — how to produce competitive products aimed at sales in foreign markets if raw milk is now more expensive than in many Eastern European countries?
Taking into account the incredible (and hardly understandable) strengthening of hryvnia exchange rate, exports of dairy products become absolutely unprofitable. Indeed, recently, domestic prices for butter, milk powder and whey have been higher than the demand prices of most importers. Therefore, dairies are reorienting sales to the domestic market or simply cut production to avoid losses.
In general, the results of the year will show sad statistics on milk processing. In the first half of the year, dairies purchased 8% less raw milk than in the corresponding period last year. This is a signal that strong measures to support dairy processing industry should be taken, or Ukrainian market will get flooded with dairy products made by our European neighbors.