Mikhail Mishchenko: the main factors in the growth of milk prices are the reduction of outbound tourism and the weak ruble

The expert reminded that according to DIA data, the hundred largest dairies in the country are growing faster than the 100 largest milk producers (100 factories processed 820 thousand tons more in 2019; 100 producers produced 530 thousand tons more). In 2020, the trend continues. In other words, there is a skew in the growth dynamics in favor of demand, the analyst stressed.

‘The market is already being redistributed. Transnational companies reduce the volume of milk processing and redistribute the demand for raw materials on the stock exchange. In addition, their revenue is not growing and even declining. National producers are growing very fast (KOMOS, Yugovsky factory of dairy products, MOLVEST, etc.). National producers, including those that are agricultural holdings, are growing even faster. They compete with the largest players both on the shelf and in raw materials,’ said Mikhail Mishchenko, speaking at the seminar "Effective dairy farming" in Ivanovo.

In addition, in the context of the pandemic, many regional and local producers of raw milk have seriously thought about their own processing and even sales. These include the example of CJSC Kalininskoe from Tver region, and Krasny Mayak from Yaroslavl region. This also redistributes the market and creates a shortage of raw materials.

‘During the summer break in the pandemic, many regional processors received their "moment of glory" and felt a strong demand from tourists (primarily residents of major megacities) who were unable to travel abroad and started spending their money at home. Expecting further demand, many maintained and increased the volume of purchases. Public catering operates in the same direction. Milk processing is developing directly in restaurants and at factories-kitchens. In general, catering is a future strong competitor of dairy plants,’ emphasized the Director of the DIA.

Analysts of the Dairy Intelligence Agency note that the number of processing enterprises in the industry is growing. For the last 2 years, the number of processing plants and workshops in Russia has increased by more than 200.

‘The national currency is falling. This, on the one hand, supports the price of milk, and on the other hand increases the cost of production of raw materials. In my opinion, the main driver of price growth is a Russian tourist who did not go anywhere, who started spending inside the country. Combined with a weak ruble,’ Mikhail Mishchenko summed up.

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