May 25, 2012

Russia anxious over raw milk's purchasing price drop

The falling purchasing prices for raw milk in Russia as observed this year, is the concern of the country's Agriculture Ministry, Deputy Agriculture Minister Alexander Petrikov said Thursday (May 24).

"We are currently concerned about the trend towards decreasing raw milk prices in most of the country's regions," Petrikov said at an agricultural meeting.

National Dairy Producers Union CEO Andrei Danilenko also confirmed that purchasing prices have plummeted.

"In 2010-11, we had stable growth in prices, while the trend for 2012 is, unfortunately, 10-15% lower," Petrikov said, adding that overhead costs for milk producers, on the contrary, has gone up every year.

According to the union's data, the raw milk price amounted to RUB13,300 (US$417.8) per tonne in May 2012 compared to RUB14,300 (US$449) per tonne in May 2011.

Petrikov said the Russian milk industry needed to be reformed, including tightening measures aimed at combating those who circumvent the technical regulations on milk and dairy products and raising the share of milk producers in the final price of dairy products from the current 40%, Petrikov said.

Petrikov added that Russia needed to improve its trade relations with its large milk supplier Belarus.

The Agriculture Ministry intends to maintain Russia's technical regulations, while also formulating a unified set of rules on milk and dairy production for the Customs Union of Russia, Belarus, and Kazakhstan, Petrikov also said.

"The ministry is developing unified technical regulations for the Customs Union. And it will try to ensure that the requirements of our technical regulations remain in force, because these requirements are more stringent than in other countries, and they benefit both dairy farmers and consumers," he said.