Agriculture Ministry: Milk Prices Growing Due to Feed Cost

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According to a statement from Russia’s Ministry of Agriculture, the cost of raw milk production has increased this year due to an increase in feed costs, which account for 45 percent of the cost structure, as well as increases in tariffs for energy resources, fuels and labor. Additionally, selling prices for raw milk and processed foods have remained constant over the last year, growing at a rate close to inflation.

Milk production grew by 1.6 percent in January-May 2021, according to the Ministry of Agriculture, compared to the same period previous year. The Ministry of Agriculture anticipates further output increase, with a final number of at least 32.6 million tons in 2021.

The ministry emphasized that, in order to help industrial businesses, the Russian government has implemented a series of policies that, among other things, allow manufacturers to lower their costs.

Compensation for part of the direct costs incurred for the construction and modernization of dairy livestock facilities, subsidies for milk production, grants to small businesses for the development of dairy production, compensation for part of the cost of paying off loans for investment loans received before 2017, and export assistance are all offered by the Ministry of Agriculture.

Dairy farmers are expecting to boost selling prices by the fall, according to RBC, because their costs are no longer covered.