Purchase prices for milk in the world are growing at a record pace. Thus, according to IFCN data, the world combined milk price in April 2022 was the highest in the history of monitoring (since 1996) and amounted to 59.7 euros/c (fat-4%, protein-3.3%).
The increase in the price of the components of the cost of milk production, inflation and a decrease in purchasing power reflect the instability of the world economy and the dairy sector in particular. Entire industries have not had time to recover from the effects of the protracted covid lockdowns of the past two years, when Russia’s cynical war against Ukraine crippled the global economy and caused skyrocketing inflation around the world.
For example, the growth rate of consumer prices in the United States accelerated to 8.6% in May this year, which is the highest rate in more than 40 years, while in the previous 10 years this rate was no more than 1.7%. The situation is similar in Europe.
The jump in the prices of feed, of which Ukraine was the main supplier, fuel, fertilizers and the rest of the cost components in 2022 will actually “eat” the record prices for finished dairy products. Thus, from May of last year to April of this year, world prices for wheat increased from 206 to 416 dollars/ton. Oil rose in price by 65% over the year to $114/barrel.
As a result, purchase prices for milk in the world are growing at a record pace. Thus, according to IFCN data, the world combined milk price in April 2022 was the highest in the history of monitoring (since 1996) and amounted to 59.7 euros/c (fat-4%, protein-3.3%).
In the largest European milk-producing countries, purchase prices are also breaking records: Germany — 45.7 euros/ha (+28% until April 2021), France — 45.02 euros (+19.38%), Poland — 43 .78 euros (+30%).
At the same time, the price of milk in Ukraine for the corresponding period increased by only 2.6% — 34.8 euros/c. The war and the blocking of exports do not provide an opportunity for more price growth.
On the domestic market, under the pressure of blocked 20 million tons of grain, the prices of grain and technical crops are record low: a ton of wheat does not exceed 200 dollars. However, at the same time, due to the rapid increase in the cost of fuel and fertilizers, the cost of growing agricultural crops of the new season in Ukraine rose by at least 60-80%. Therefore, the possibility of compensating for the increase in prices for other components of milk production by means of a forced reduction in the price of feed appears to be very temporary.
Despite all that, currently Ukrainian dairy products are quite competitive on the world market. The development of new logistics solutions and work with new partner countries continues, and we hope that it will bear fruit in the coming months.