By the estimation of the Association "Ukrainian Agribusiness Club” (UCAB), as a result of reduction of purchasing prices for milk, the income of agricultural enterprises from milk realization has declined for the month by 150 mln UAH.

After the introduction of restrictions for dairy products export to the Russian Federation, milk purchasing prices have fallen since the mid-April by 15-20%. Seasonal growth in milk production also had certain  impact on decreasing of purchasing prices, but this factor has reduced the price no more than by 4-5%.  As a result of worsening of trade relations with Russia, enterprises received from the sale of one liter of milk on 0,50-0,80 UAH loss. Having realized near 230 ths t milk per month, agricultural enterprises have had losses of 150 mln UAH.

Even the Memorandum in which processing companies have pledged to provide stable milk prices for agricultural producers and hold them at a certain level could not ensure the proper level of prices. This memorandum is rather declarative because it could not stabilize prices, and now no one understands the real price of milk, which has to be paid to the producers.  

A big problem for milk producers is the rapid growth of milk costs as a result of higher prices for feed. The price of soy meal from the beginning of the year has increased by 40% and now is about 7700 UAH/t. Price for corn increased by almost 30% – up to 2500 UAH/kg for the last two months.

"We should understand that such discbalance is threatening to the industry and makes it unprofitable. If the situation does not change, then about 100 ths heads of cattle can be slaughtered soon. The most dangerous is cutting heifers, which significantly reduces the number of replacement and threatens the decline of dairy industry the next 3 years ", - said Alina Zharko, the Expert on agrarian markets of UCAB.

Association "Ukrainian Agribusiness Club" 

3 floor, 146 Zhylianska Str. 

01032 Kyiv, Ukraine 

Phone/Fax: +380 44 2362097/79 

kotyk@ucab.ua  

Tetiana Kotyk  

www.ucab.ua

The Association "Ukrainian Agribusiness Club" (UCAB) www.ucab.ua was founded in 2007 to protect the economic and professional interests of players of agribusiness in Ukraine. UCAB is a unique platform in Ukraine for establishing business contacts between the leaders of agribusiness, improvement their work and dialogue with the government. UCAB actively supports Ukrainian producers in establishing and maintaining international business relations. The Association consists of the largest producers and processors of agricultural products in Ukraine.