Usually, seasonal decrease of purchase prices for milk starts in April. It is associated with an increase of the supply in agricultural enterprises and private households. Typically, in this period green feeds are expected to appear, it allows reducing the cost of milk production.

This year is different from previous one, the weather conditions in Ukraine and in several other countries (mainly the EU) do not contribute to seasonal increase of milk production. In turn, the limited supply of raw milk in the EU, due to reduced production compared to last year, provoked a rise of prices in stock-market dairy products (butter and milk).

In addition, the drought in Oceania (New Zealand and Australia), caused a significant reduction of raw milk production and increase of cost of milk due to lack of forage. Accordingly, in March stock prices for dairy products (butter, cheese and milk powder) increased by 10-20%compared with February. The fact is that this region is one of three major world exporters, it will certainly lead to a rise of prices for raw milk as well as for dairy products.

The fact of temporary increase in import tariffs (from 15 to 18.3%) for individual dairy products at the territory of the Customs Union will have no material impact on the Ukrainian market. In general, an increase in taxes only applies to butter, grated cheese and cheeses such as «feta», and such products are exported in small quantities.

Considering all the above-mentioned factors, it is expected that the price for raw milk from agricultural enterprises will be relatively stable. However, it is likely that some processors may start slow and slight decline of price.

For April 9, the average purchase price for the highest quality milk from farms from Association of milk producers was 4.15 UAH/kg, and in early May, it may decrease by 2-4%.

milkUa.Info