A relative stabilization of raw milk prices has occurred in the domestic market. However, there are risks of further price decreases due to reduced supplies of skimmed milk powder and processed cheese products, the introduction of protectionist measures in export markets, as well as in the event of foot-and-mouth disease spreading, according to Georghii Kukhaleishvili, an analyst at the Association of Milk Producers.
The average purchase price of extra grade milk as of April 23 was UAH 16.15/kg excluding VAT, which is UAH 0.20 less than a month ago. The price range for this grade on farms varies from UAH 15.50 to UAH 16.50/kg excluding VAT. The lower and upper limits of the price range decreased by UAH 0.20.
Higher grade milk costs an average of UAH 15.95/kg excluding VAT (-UAH 0.20). Prices for higher grade milk fluctuate from UAH 15.30 to UAH 16.20/kg excluding VAT. Compared to the monitoring results of the second half of last month, the lower limit of the price range decreased by UAH 0.20, and the upper limit decreased by UAH 0.10.
The average price of first grade milk was UAH 15.60/kg excluding VAT and decreased by UAH 0.05 compared to the second half of last month. The minimum price on farms was UAH 15.00/kg and did not change over the last month. The maximum price was UAH 15.80/kg and decreased by UAH 0.20.
Accordingly, the average weighted price of the three grades was UAH 16.00/kg excluding VAT, which is UAH 0.15 less compared to the previous period.
Georghii Kukhaleishvili notes that raw milk prices stabilized as of the second half of April. Compared to the first half of the month, the lower and upper price ranges did not change. There were localized decreases in purchase prices in the middle of the range due to an increase in surplus raw milk in the domestic market, and the volume of dairy production in Ukraine is outpacing its sales volume.
With a surplus of raw milk, an increasing volume of dairy imports, especially cheeses, the share of which already accounts for almost 50% on Ukrainian shelves, poses a challenge for the industry. The sharp increase in imports by retail chains is pushing domestic cheesemakers to the brink of survival, and further herd reductions can be expected in the future.
The outbreak of foot-and-mouth disease in neighboring Slovakia and Hungary remains a threat to the Ukrainian dairy industry. If the infection enters Ukraine, a significant decrease in raw milk prices is highly likely in the market due to the introduction of quarantine and a ban on the export of finished products. It is crucial to implement biosecurity measures on dairy farms to avoid the spread of infection. In such a case, Ukrainian companies could increase their exports of dairy products against the backdrop of the spread of foot-and-mouth disease and the introduction of export bans in Central and Eastern European countries.
Press Service of the Association of Milk Producers
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