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Ukrainian producers face another drop in milk prices
Outbreaks of foot-and-mouth disease in European countries and the cancellation of the preferential duty-free regime by the EU for Ukrainian exporters of agricultural products create the prerequisites for a further decrease in prices for raw milk in Ukraine, reports Georgy Kukhaleyshvili, an analyst of the Association of Milk Producers.
The average purchase price of Extra Grade milk as of March 25 was 16.35 UAH/kg excluding VAT, which is 0.45 UAH less than a month ago. The price range for this grade in farms varies from 15.70 to 16.70 UAH/kg excluding VAT. The lower limit of the price range decreased by 0.80 UAH, and the upper limit decreased by 0.30 UAH over the last month.
Higher Grade costs on average 16.15 UAH/kg excluding VAT, which is 0.50 UAH less compared to the previous month. Prices for Higher Grade milk range from 15.50 to 16.30 UAH/kg excluding VAT. Based on the monitoring results of the second half of the previous month, the lower and upper limits of the price range decreased by 0.50 UAH.
The average price for Grade I milk was 15.65 UAH/kg excluding VAT, down 0.35 UAH compared to the second half of last month. The minimum farm price was 15.00 UAH/kg, down 0.20 UAH compared to last month. The maximum price was 16.00 UAH/kg, down 0.20 UAH.
Accordingly, the weighted average price of the three grades was 16.20 UAH/kg excluding VAT, down 0.40 UAH compared to a month ago.
Georgy Kukhaleyshvili notes that purchase prices in Ukraine continued to move downward in the second half of March. However, the surplus of raw milk on the market, which puts pressure on purchase prices, decreased compared to the first half of March due to an increase in the volume of dairy exports from Ukraine and a certain increase in domestic consumption. Consumers are accustomed to high prices for dairy products. Dairy processing plants stimulate the consumption of dairy products in Ukraine by holding promotional discounts on their products in retail chains. The profitability of skimmed milk powder and butter production improved, but in the case of cheese product and casein it worsened.
It is expected that as of April 1, there may be a slight decrease in the price of raw milk in Ukraine by 0.20−0.30 UAH. In terms of euros, raw milk prices in Ukraine are higher than in New Zealand and South American countries, which actively export their dairy products to Asian and African countries and compete with Ukrainian and European exporters.
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