The dairy market is predicted a price collapse this year

Submitted by bashun on Mon, 03/12/2018 - 09:48

Incomes of domestic milk producers in February decreased by 7.6%, and since the beginning of the year the fall has been almost 12%.

This was reported by Andrii Yarmak, an economist at the investment department of FAO.

The reasons for the decline in the yield of dairy production are by no means dairy. This trend was the result of devaluation of the hryvnia and rising prices for concentrated feed. It also added a factor in the decline in milk prices - despite the fact that world prices during this period have traditionally grown.

"In February 2018, the profitability of milk production was 5% lower than in February 2017. In January, the yield was almost comparable, " analyzes Andrii Yarmak. At the same time, the specialist draws attention to the fact that at present the profitability of milk production is higher than it was in the crisis years of 2015-16. But, it is lower than in the last six years.

World prices for dairy products remain too high, according to FAO. This will certainly provoke even greater production growth, pushing prices. And very expensive milk fats cause pressure on protein prices.

"Therefore, there is a possibility of a price collapse in the current year. And now we are very tightly tied to export prices, " emphasizes Andrii Yarmak.

In general, he advises to develop the production of export-efficient cheese and other dairy products, because "playing casino on clean commodities is very dangerous."

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