AGRO PERSPECTIVE «AGRO+ MILK UKRAINE #52 February 3, 2011.
Volodymyr Pishcholka, Ministry of Agrarian Policy and Food Stockbreeding Markets Department Deputy Director, said in a few days Ministry will adopt Decree determining new rules of distribution of accumulated VAT financial means between Ukrainian stockbreeders. New rules stipulate that stockbreeders should receive subsidies not on per 1 cow head principle, but for milk they sell in terms of milk basic fatness.
Experts admit if Ministry of Agrarian Policy and Food really adopts per 1 liter milk subsidizing as main principle of country stockbreeders’ subsidizing, it will significantly support Ukrainian dairy industry. So, experts estimate this variant of country dairy industry support as rather efficient. Experts say if this variant is adopted, not only raw milk output growth, but also raw milk quality improvement will be encouraged, — since new subsidizing rules stipulate that more subsidies should be given to those stockbreeders who supply more qualitative raw milk for processing. Thus, the higher is raw milk fatness, the higher is compensation rate for raw milk supplied for processing.
Besides, Volodymyr Pishcholka also made it known Ministry proposed to direct UAH500 mn State budgetary financial means to agricultural producers as partial compensation for their livestock-breeding farms/mixed feeds plants construction and updating expenditures. Pishcholka admits dairy farms will be this program’s priority.
In meanwhile, Ministry of Agrarian Policy and Food forecasts that Ukrainian raw milk output decline (which has been going on within many years) will stop within this year; Ministry says even 3–4% output growth is possible. In particular, Ministry forecasts within this year Ukraine will produce in total 11.5–11.7 mn MT raw milk, up against last year total 11.2 mn MT.
As to State Statistics Committee earlier report, Ukrainian 2010 raw milk total output had declined to 11.254 mn MT, down 3.1% against 2009.
As reported Ministry of Economics, as of this year Jan 30, Ukrainian markets’ bulk milk (fat 2.5%) prices have risen averagely by 0.6%, to UAH6,52 per kg (up against this year Jan 20); simultaneously, retail sale network bulk milk (fat 2.5%) prices have grown averagely by 0.6%, to UAH6,29 per kg.
As to Ministry, as of this year Jan 30, Ukrainian markets’ butter (fat 72%) prices have strengthened averagely by 0.7%, to UAH51,98 per kg (up against this year Jan 20); at same time, retail sale network butter (fat 72%) prices have improved averagely by 0.9%, to UAH53,01 per kg.
As to report, as of this year Jan 30, Ukrainian markets’ fermented cheese (fat 9%) prices have climbed averagely by 0.9%, to UAH25,54 per kg (up against this year Jan 20); simultaneously, retail sale network fermented cheese (fat 9%) prices have mounted averagely by 0.5%, to UAH33,26 per kg.
As to Ministry, as of this year Jan 30, Ukrainian markets’ sour cream (fat 20%) prices have grown averagely by 0.4%, to UAH26,95 per kg (up against this year Jan 20); at same time, retail sale network sour cream (fat 20%) prices have risen averagely by 0.5%, to UAH16,75 per kg.
As to State Statistics Committee data, in 2010 Ukrainian all categories companies have supplied for processing in total 4,737.242 MT milk/dairy products, up 66,042 MT (+ 1.4%) against 2009.
In 2010, agricultural companies supplied 1,890.388 MT milk/dairy products for processing (39.9% Ukrainian total), population individual economies — 2,544.203 MT (53.7%) and other companies — 302,651 MT (6.4%).
In meanwhile, within reporting week Ukrainian domestic market milk powder/butter prices were going down: main domestic dairy processors started drying milk powder in big lots and therefore reduced their butter purchases down to minimal low.
As of this week, Ukrainian domestic/external cheese markets remained rather stable; as earlier, domestic/external cheese sale rates were rather high. Market operators expect Ukrainian cheese output will start declining in near future, resulting in country cheese reserves’ shortening and, consequently, whey offer deficit followed by whey prices’ corresponding growth.
MILK POWDER
Within reporting week SMP (produced in 2010) offer prices ranged within UAH23–25 per kg; SMP (produced in 2011) offer prices fluctuated within UAH27–28 per kg, down against last week UAH28–29 per kg.
As of this week, SMP export prices ranged within US$3,000–3,100 per MT (for non-CIS countries), US$3,300–3,400 per MT (for Turkmenistan, Tajikistan and Kazakhstan) and US$3,800 per MT (for RF).
Within this week domestic market WMP prices remained UAH35–37 per kg, unchanged against previous week; WMP export prices ranged within US$4,000–4,100 per MT.
BUTTER
Within reporting week butter 72.5% fat domestic market prices have declined to UAH39–41 per kg (down against previous week UAH41–42 per kg).
Within this week Ukraine exported butter in just small lots, with export prices ranging within US$4,700–4,900 per MT.
CHEESES
Within reporting week domestic market cheeses 50% fat domestic market offer prices remained UAH42–48 per kg (unchanged against last week).
As of this week, cheeses 50% fat export prices ranged within US$5,500–5,800 per MT.
WHEY
As of this week, domestic market whey sale prices ranged within UAH8,0–8,2 per kg; this week whey export price equaled to US$820 per MT.
Within this week domestic market demineralized whey prices ranged within UAH8,9–9,0 per kg; demineralized whey export price equaled to US$950 per MT.
As to local traders/producers’ forecast, domestic market demineralized whey prices will start growing since this year mid Feb.
CASEIN
Within reporting week domestic casein market situation remained same as within previous week. As earlier, Ukrainian domestic casein reserves remained exhausted.
Within this week domestic market casein prices ranged within UAH60–65 per kg; domestic casein trade rates were very slack.
There was no casein export within this week. As of this week, casein export offer prices fluctuated within US$8,000–8,200 per MT.
Ukrainian dairy products’ export prices (US$ per MT)
