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What to expect in the milk market before the end of September

 

Prices for entire line of dairy products in Ukraine are growing. As on September 22, milk with fat content 2.5% cost 24.27 UAH/kg (+1.8% per month), yogurt with fat content 2.5% cost 48.86 UAH/kg (+1.5%), butter — 190.11 UAH (+1.18%), Russian cheese with fat content 50% — 169.35 UAH (+0.68%).

A number of factors caused this: the main one is the active export and increase of price for butter in the world, the devaluation of the hryvnia, which has been observed since the end of August, which makes it possible to export profitably. Hryvnia against the dollar for this period decreased by 3% — to 26.2 UAH/USD.

In addition, the market lacks dairy raw milk, especially quality milk. It is due to seasonal and cyclic influence. The crisis of previous years affected the reduction in the number of livestock and, as a consequence, the volume of milk production.

According to the results of eight months, milk production of all kinds decreased by 0.9%, to 7 million 171.7 thousand tons. It should be noted that the decline in milk production is characteristic to private households, at the same time, with a reduction in the number of livestock in the industrial sector, the production shows an increase. This was due to the fact that non-productive farms emerged from the market. The farms now professionally approach to the management of the dairy business and consider costs as much as possible.

Seasonal factor also takes place, in August, 1 million 28.3 thousand tons of milk of all kinds was produced, which is 4.38% less than in July this year, 0.38% less than in August 2016 and by 10% than in August 2014. The seasonal trend will continue to grow.

In the short term, the Ukrainian dairy market should expect further price increase due to seasonal decline in milk production. But export, even if it stops growth a little, will be in the black. The prices for butter, according to the international experts expectations, will continue to grow.

Accordingly, do not expect that prices for dairy products will drop.

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