Raw Milk prices are weakening
Market of raw milk has started to work at habitual schedule after New Year’s holidays.
In January the situation developed not that way which was expected in the beginning of the month. Mass reduction of prices has not occurred, despite abolishment of milk subsidies and traditionally weak sales in the beginning of the year. Quite good demand for dairy products surprised operators. At the same time, now the consumers prefers cheap, low-marginal dairy products, the prices for which have grown not so considerably, as, for example, for meat products.
Crimean market, where rather cheap Ukrainian products are more competitive in comparison with local and Russian products, continues to influence also.
Despite mentioned above, milk prices are weakening. Processors gradually reduce them after “individual talks” with farmers. It is the most difficult to change prices in the central regions of the country. There the agroholdings cannot accept the situation and threaten plants with reduction of deliveries, or cancelation of the contracts.
From the beginning of the year, milk price has declined by average UAH 0.05-0.10. In the end of January base price for milk from farms is at UAH 4.50-4.90/kg, and from households – UAH 2.60-3.15/kg in Ukraine.
Processors could not agree about mass reduction of prices starting from February. Despite economic factors, they do not want to lose milk in winter period and in February a growth of consumption of milk fat (sour cream, cream, dairy desserts) is traditionally expected. At the same time it does not mean that milk prices will not decrease. Producers should expect selective revision of prices the next weeks.