Over the sixth consecutive month, the Conditional Milk Production Return Index (CMI) is declining, although many market participants expected stabilization in June. This was reported by Andrii Yarmak, an economist of the Food and Agriculture Organization of the UNO FAO on his Facebook page, agravery.com reports.
He noted that the last time such a trend was recorded in 2012. The main reason is the continuation of the decline in prices for milk, which persisted in June. Even a slight reduction in the price of fodder did not prevent losses from falling prices for milk.
"The cumulative fall of CMI this year was sharp over the past five years and reached 40.0%," says Andrii Yarmak.
According to him, the positive can only be found in the fact that the decline in June reached only 1.5%, which is the lowest monthly decline in profitability this year.
"In June 2018, professional milk producers earned 18.7% less than in June 2018. At the same time, the level of profitability of dairy production was higher than in June 2014 and 2015 and lower than the average for the last five seasons for June by 5.2%,"- calculated in FAO.
According to experts, in the first six months of 2018, milk producers received 11.3% less profit than in the same period of the previous year. If we compare incomes with the average for six years for the same period, then the fall in profits was less tangible - by 2.6%.
"As a rule, in July the CMI grows insignificantly. Only once in the last six years, the CMI in July slightly decreased until June. However, in the current year, it is likely that another fall of the CMI may occur. The fact is that we are closely integrated into the world market, and the tendencies in it at the end of June and the beginning of July have become quite negative. However, let us hope for the best, especially when finally there are shifts in cooperative legislation. This gives us hope for a better future for the Ukrainian dairy industry."- comments says Andrii Yarmak.