Against the background of negative economic situation in the country, it cannot be definitely said that the dairy branch is in very bad situation today. 

Macroeconomic forecasts are reconsidered almost every week in Russia: decline of gross domestic product, ruble devaluation, inflation etc. do not give reasons for optimism.

Of course, consumer demand declined, but this tendency leveled a problem of import substitution. And the prices for products grew not as cardinally as they could, except for cheeses.

Big stocks of milk powder and butter also restrain the market. Another question is: what will be when it will run out of stock in the end of winter. At today’s dynamics of ruble falling, even Belarusian products can become very expensive soon.

While there are still financial possibilities, agricultural enterprises invest in cattleand processors expand capacities.

Subsidies, budgeted by the Government at RUB 8.4 for partial compensation of expenses for milk producers next year, give certain optimism, but farms should be ready for worse scenario and to count more on themselves.

Milk producers are also too optimistic hoping for further growth of milk prices, despite their record levels now.

In short-term the price may become stronger further, but consumer possibilities and demand will fall further also. It means that one day there will be no possibility to cover the cost of production, and milk prices will fall.

infagro.com.ua