In Ukraine, raw milk prices rose by 10% in September, and over the past three months they have risen by almost a quarter, while the cost of processed products has risen by 15%, according to Infagro, an industry information and analytical agency.
“The weather has become quite comfortable, there are fewer power outages, cow productivity is recovering, and milk is available. With the relative stability of energy supply, there are fewer problems with the collection of raw materials and logistics. All this is good for milk producers, but processors suffer from the growth rate of prices for raw milk,” the analysts said.
Experts noted that the current purchase price of milk at 18 UAH/kg is no longer surprising. Moreover, there are cases of its purchase even at 19 UAH/kg. Processors are also trying to raise prices for their products. However, while milk prices have risen by a quarter, few have managed to increase prices for most dairy products by more than 15%, except for some butter producers. As a result, most factories are already operating on the brink of loss, and some are making a loss.
“The price increase will not stop in October. Fresh dairy products and cheeses may rise by another 12-15% by the end of the year. That is, dairy inflation in 2024 could be three times higher than the overall inflation in Ukraine. Of course, this will lead to a decrease in the consumption of dairy products in favor of other products with a lower degree of price increase,” experts predict.
Analysts believe that the main reason for the rapid rise in raw material prices is the high butter prices, which have already reached their peak.
“It is very likely that in October European traders may significantly reduce their demand prices for Ukrainian products. In this case, the chase for raw materials in Ukraine will definitely stop, and starting in November, milk purchase prices will stop rising. And if the rise in prices causes a significant drop in sales of dairy products, it is even possible that, despite the period of the lowest supply in the season, there will be a certain decrease in the cost of raw materials,” Infagro summarized.
