AGRO PERSPECTIVE «AGRO+ MILK UKRAINE #58 March 17, 2011.
As to State Statistics Committee data, Ukrainian Feb 2011 raw milk average output equaled to 589,200 MT (up 4.5% against Jan 2011, but down 0.3% as of Feb 2010). Within Jan-Feb 2011 country raw milk output gross output totaled 1,153.100 MT, down 1.1% against Jan-Feb 2010.
As to Committee, as of Mar 01/11, Ukrainian cattle number totaled 4,773.900 heads (down 6.6% against Mar 01/10, but up 3.9% as of Feb 01/11).
As of Mar 01/11, Ukrainian all categories companies cows’ number totaled 2,642.800 heads (down 3.9% against Mar 01/10, but up 0.1% as of Feb 01/11).
In 2010, State subsidy per 1 MT raw milk has grown by 63% against 2009. However, in 2011 subsidizing rates can change after new Ukrainian Tax Code having had come into force in 2010.
Thus, in 2010 State subsidy per 1 MT raw milk has risen from UAH248 (in 2009) to UAH403, up 62.5%. It is to be admitted, in 2010 State raw milk subsidy for processing companies was 13.6% (in terms of purchase prices).
In 2010, Ukrainian agricultural companies have sold 1,857.600 MT raw milk to processors at average sale price UAH2,949.6 per MT.
As to Committee, in 2010 Ukrainian dairy products’ producers significantly raised their wholesale prices (up 20.4% against 2009), what resulted in VAT amounts corresponding growth.
Consequently, grown VAT amounts were directed as State subsidies to raw milk producers. As for regions, amounts of State subsidies directed to raw milk producers ranged from UAH132 per 1 MT (Lugansk region) up to UAH686 per 1 MT (Sumy region).
New Ukrainian Tax Code (which had come into force in 2010) stipulates that in 2011 all financial means received from processors should be accumulated in State budget Special Fund (instead of being recalculated and paid directly to raw milk producers, as earlier) and after that given to raw milk producers as dairy farming State support. It is to be admitted, State budget stipulates that 2011 dairy farming State support is to be UAH2.03 milliard.
It is to be mentioned, Government had initially planned to give subsidies per 1 cow head; however, finally Government has come to conclusion to give subsidies per 1 MT raw milk (as it had been carried out previously). Thus, in 2011 State subsidies for agricultural companies will be UAH350 per 1 MT (population individual economies — UAH300 per 1 MT).
So, it is possible to conclude that Ukrainian raw milk producers’ State support mechanism has deteriorated: first, State subsidies for agricultural companies have declined averagely by UAH53 per 1 MT (in absolute terms); second, all positive features of previous State support mechanism have been lost (in part., automaticity of payments, payments’ monthly indexation and absence of distribution vertical); third, now population individual economies are prone to refuse from State subsidizing whatsoever, — considering those significant financial/time expenditures necessary to receive it.
Thus, in 2011 Ukrainian raw milk producers will be able to receive State subsidizing financial means only after these financial means make an “honor lap” — through State budget Special Fund and districts’ local commissions decisions back to Kyiv.
In meanwhile, within reporting week Fonterra internet auction all dairy products’ prices have declined resulting in Ukrainian domestic market SMP prices’ fall.
As of this week, Ukrainian home market casein prices followed global market tendencies and therefore started growing. However, all other dairy products’ domestic market prices remained unchanged against previous week.
In meanwhile, Ukrainian market operators affirm country domestic market cheese, whey and butter prices will start going down in near future due to raw milk resources’ output seasonal growth, producers’ unsold big reserves and low market demand.
Within reporting week domestic market whey sale price was UAH8,5 per kg; this week whey export price equaled to US$950 per MT.
Within this week domestic market demineralized whey prices ranged within UAH9,0–9,5 per kg; demineralized whey export prices fluctuated within US$1,000–1,100 per MT.
Ukrainian dairy products’ export prices (US$ per MT)
