News
02.04.2013
Ukrainian milk producers on the verge of survival
Economic results of agricultural companies in 2012 indicate the efficiency of milk production at the level of 2.3%. This suggests that the profitability of milk production declined significantly in comparison to 2011, when it amounted to 18.5%. This was reported by the Association "Ukrainian Agribusiness Club" (UCAB) with reference to the data, provided by the State Statistics Committee.
Last year’s results indicate unprofitability of milk production in 11 regions of Ukraine. The lowest profitability was observed in Chernivtsi region, amounting to -17.0%, and in Dnipropetrovsk and Odessa regions - about -10.3%. The highest profitability was achieved by enterprises from Zakarpattya - about 40%. Though, it should be noted that the number of cows in that region and gross milk-yields are the lowest in Ukraine, which does not allow to name the abovementioned ratio as a promising one.
"For example, Poltava region can boast with the largest number of cows in agricultural enterprises but the profitability of milk production amounts only to 5.8%, despite almost the best milk-yields in Ukraine - 5431 kg/year at average" – the Advisor on agricultural markets of UCAB Alina Zharko says.
Profitability decrease is a consequence of the rising prices for fodder and reduction in purchase prices for milk. Since March 2012 until the end of the year, prices for raw milk from farms were lower than in the last year. Last year, in summer and winter, milk prices were even lower than in 2010. Such low prices are caused by an increase in milk production output. In 2012, gross milk output in farms totaled 2.5 million tons, which is 13.1% more than in the previous year. Milk production in households remained relatively stable. However, due to the growth in milk production output in farms, its volumes for processing increased, which also influenced the price cut.
"This year, seasonality is a factor that holds milk prices on a quite high level – they often exceed 4 UAH/kg. The major reason - the rapid increase in imports of cheap whole-milk products. Under such hard-to-predict market conditions, milk producers can hardly stay profitable", - UCAB expert says.
Association "Ukrainian Agribusiness Club"
Velyka Zhytomyrska str., 20 А, office 53, Kyiv, 01001
Phone: +380 44 201-4950
Fax: +380 44 201-4951
099 272 59 30
Tetiana Kotyk
www.agribusiness.kiev.ua
The Association "Ukrainian Agribusiness Club" (UCAB) www.agribusiness.kiev.ua was founded in 2007 to protect the economic and professional interests of players of agribusiness in Ukraine. UCAB is a unique platform in Ukraine for establishing business contacts between the leaders of agribusiness, improvement their work and dialogue with the government. UCAB actively supports Ukrainian producers in establishing and maintaining international business relations. The Association consists of the largest producers and processors of agricultural products in Ukraine.
