In conditions of total trading ban of Russia and price decline on the world dairy market, only seasonal reduction of milk production"rescues" the Ukrainian operators.

Since frosts set in, milk supply was considerably reduced in Ukraine. In these conditions there is no problem of milk surpluses any more, only therefore the prices for it do not fall.

Actually, lowered milk production is not the best way out, it will not bring profits for operators. If there was trade with Russia, farmers would get higher milk price and exporters (or rather some of them) would make a lot of money. At the same time, in that case the producers of fresh milk products would be in very uncomfortable situation — they should work at loss, because of high prices for milk and weak consumer demand. So, some processorseven profit by Russian trading wars.

As a whole there was no big news on dairy market in second half of October. Authorities promised again that Ukrainian production would be exported to Europe soon, that only one of all inspected in September plants would not receive the permission for deliveries to the EU. At the same time, everyone knows that Ukrainian dairy products are not needed in Europe.

The authorities also assure agricultural producers, that the preferential taxation will not be cancelled for them till 2017. They report about 90% payment of subsidies and grants for milk and meat producers, but that is only for last year.

Now it is hardly possible to forecast the development of the situation for Ukrainian operators in winter, but in any case it will be very difficult. There are no normal sales in Ukraine and abroad, and they will hardly be. It may be possible to survive somehow in winter, but it is unclear what will be in spring when there will be surpluses of raw milk. Many hope for a miracle, even for renewal of trade with Russia ...

infagro.com.ua