Russia’s dairy industry seeks governmental support in light of feed price hikes

According to members of the “Soyuzmoloka” and regional milk produces, the drought in Russia and other grain producing countries has led to a sharp rise in prices for grain and soybean meal, which together currently composes the largest share in the price of compound feed production.

As a result the feed prices for milk production stock nearly doubled over the same period of 2011, noted members of the Union. This in turn led to an increase in the average cost of producing a litre of milk by 2 rubles (US$0.70). At the same time the average prices for raw milk in the market in the first half of this year decreased by 10% compared to same period in 2011, resulting in producers suffering additional losses.

“The regions where drought is registered will unable to prepare the required volume of coarse grain and feed production, which will lead to a reduction in the number of milk stock, if feed can not be acquired from regions not affected by the drought,” representatives of ‘Soyuzmoloko’ said.

It is because of this that the National Union of Milk Producers has asked the government to allocate subsidies not less than 1 ruble (US$ 0.35) per litre of milk produced in 2012 to compensate the impact of rising prices for feed. At the same time Soyuzmoloko asked the government to allocate funds for the purchase of feed to maintain the number of breeding stock (5 thousand rub (US$ 170) / head) for all milk production enterprises in the regions affected by drought.

“These measures will help to keep livestock and curb the rise in prices for finished dairy products for the consumer” added the representatives of the union.