milk and dairy products,
prices,
dairy production
Dairy industry: the results of the 2016 and projections for 2017
After relatively stable from the point of view of profitability business of 2012-2013, when the selling price of milk of «extra» variety for farms was in the range of EUR 0.40 per kg, in 2014, we received a very rapid and prolonged decline in purchase prices for milk. Since February 2015 to October 2016 the price moved in a sideways corridor in the range of 0.16-0.18 Euro/kg.
And 2016 was one of the most unprofitable in the history of the dairy industry in Ukraine. It was told about by the Vice-President of the Association of milk producers Anna Lavrenyuk.
The expert added that according to estimates of the expert group of the FAO, the production of milk in May - September was historically the most unprofitable. Thus, the conventional dairy index for September 2016 showed a drop of 31.4% relative to the average monthly value for the last 5 years. Since October, we are observing a moderate recovery in global dairy markets that is why prices for raw milk in Ukraine began to rise. This will lead to the fact that, according to forecasts, the conventional dairy index of milk production will rise to 7% at the end of the year relative to the end of 2015. However, despite this, the profitability of dairy business in Ukraine remains below the average of 2011-2015 years and is minus 22.5%.
«Against these negative factors we have one huge positive advantage — all these powerful circumstances have prompted milk producers to consolidate,» said Anna Lavrenyuk.
This relates not only to defensing of own interests and the interests of the industry in the legal field, to establishing effective dialogue with legislative and executive power, but also to searching for new reserves of profitability. In particular, in 2016 we had the first precedent, when farms began to unite, made the first prototype of the milk cooperative.
Dairy cattle breeding
As of December 1 this year there are 2 million 134.2 thousand cows in Ukraine, which is 3.9% less than last year. The number of industrial population decreased by 4.5% and amounted to 486,4 thousand heads, and at people’s households — by 3.6% — up to 1 million 647,8 thousand heads. Estimated at end 2016, the national herd would amount to 2 million 73 thousand (-4,29%) heads, including 483 thousand (-4,4%) — industrial and 1.59 million (-4,2%) — in people’s households.
At the end of 2015, Ukraine produced 10.6 million tons of milk, and by the end of 2016 we should expect around 10.3 million tons. For the last 11 months, Ukraine has produced 9.7 million tons of milk (-2.3% to the corresponding period in 2015), including 25,7% of this amount in the industrial sector. The remaining 74.3% was produced in people’s households.
The quality of milk collected for processing has significantly improved. The arrival of badly needed extra quality during the first three quarters grew by 4.1 %, from 9.7% to 13.8% (267 thousand tons). The milk of the highest grade increased from 34.8% to 36.4% (705,2 thousand tons). The volumes of milk of the first grade have sharply decreased — from 50.4% to 43%.
