Purchase prices for milk in the first decade of February showed a slight decrease. The reason for the decrease in all grades is the limited demand for dairy products on foreign markets, as well as certain circumstances on the Ukrainian market.
This was reported by the analyst of the Association of Milk Producers, Gеorgiі Kukhaіleshvili.
The expert notes that, as of February 7, the average purchase price of the extra grade dropped by 7 kopecks. - up to UAH 12.13/kg excluding VAT. Such a reduction is, first of all, connected with a decrease in the price offer to dairy farms from factories that specialized in dry milk. At the same time, even an increase in the maximum price was recorded in the regions with insufficient supply of milk (the South). Therefore, the range of prices for the extra grade in farms was from UAH 10.84/kg to UAH 12.80/kg.
The higher grade went up in price by 8 kopecks. - up to UAH 12.13/kg, compared to the price as of January 27. In farms, the order of prices was from UAH 10.00/kg to UAH 12.20/kg.
Accordingly, the weighted average price of the three grades did not change during the last ten days and remained at the level of UAH 11.97/kg.
Prices for raw milk do not increase, despite the reduction of its production in Ukraine. According to the results of 2022, 7 million 659.9 thousand tons of milk of all grades were milked, which is 12.1% less than in the same period of 2021. Also, in 2022, the number of cows in all grades of farms decreased by 13%.
"The decrease in prices for extra grade raw milk in Ukraine is due to a large supply of raw milk in Europe, the USA and Oceania and a decrease in demand for dairy products in export markets, primarily in China. China reduced imports of dairy products due to reduced demand in the domestic market under quarantine restrictions. The strategy of the Chinese government to increase milk production in the middle of the country also plays its role. According to the USDA, in 2020, China increased milk production by 6.4%, and in 2023, it plans to increase the volume by 4.3%", - emphasized Gеorgii Kukhaleishvili.
As a result, as of January 23, raw milk prices in the EU decreased by 0.8%, according to the PRI.EU.Milk report:
Europeans are forced to produce large volumes of milk powder and casein and fill warehouses with these products due to limited demand. It is not surprising why in January 2023 Ukraine exported dairy products worth 15.9 million dollars, which is 7.2% less than in the same period last year. During 2022, the EU was the main importer of dairy products from Ukraine.
The situation in the markets of Oceania and the USA is similar:
According to FreshAgenda, during 2023, the production of dairy products in Australia is forecast to decrease by 6-7%. According to Rabobank estimates, the decline in dairy prices in the US is due to reduced domestic consumption and low demand in foreign markets. American farmers are forced to reduce the amount of milking.
"The reduction in the volume of milk consumption by the population in Ukraine due to a decrease in income, growing unemployment, the negative consequences of the war and the seasonal factor plays its role, because due to the increase in energy prices in the winter period, Ukrainians save on dairy products," - concludes the expert.
Press service of the Association of Milk Producers