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Milk prices could increase by Rs 8-10 in summer due to fall in production, fodder shortage

Stakeholders ask Modi govt to import milk & milk products to create buffer stock. This would make India a net importer for the first time since 2011-12.

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New Delhi: A shortage of fodder and a resultant decline in milk production and procurement has meant that prices of the essential item could increase by Rs 8-10 in the summer.

Citing this dairy shortage, multiple milk federations and the Indian Ice-Cream Manufacturers’ Association (IICMA) have written to the Narendra Modi government to import milk and milk products, in order to create a buffer stock of about 65,000 tonnes of skimmed milk powder and keep the prices in check. India’s annual consumption is about one lakh tonnes, so they said this should be the minimum buffer stock.

This, in turn, could make India a net importer after almost a decade — in 2011-12, the value of dairy imports stood at Rs 22.5 crore.

Speaking to ThePrint, an official from the Ministry of Animal Husbandry, Dairying and Fisheries said milk cooperatives as well as private dairies have reported 10-15 per cent lower procurement over the “flush” season of October to March, when milk production goes up 50 per cent. “So, the situation will be even more grim in the lean period of April-September,” the official said.

“However, this has resulted in better remunerative prices for farmers, as in states like Maharashtra, Gujarat and Karnataka, farmers are now getting Rs 31-32 per litre for cow milk, as compared to Rs 21-22 per litre a year ago,” he added.

This shortage in milk supply could also result in an increase in the price of dairy products like skimmed milk powder well beyond Rs 400 per kg. Skimmed milk powder prices have already hit Rs 300-350 per kg compared to Rs 150-200 per kg last year.

Also read: Ice cream could get costlier by 7-10% after spike in prices of milk & related products

Fodder shortage crisis

According to a report published by the Indian Grassland and Fodder Research Institute, there is an availability deficit of 23.4 per cent for dry fodder and 11.24 per cent for green fodder.

The report also said the productivity of Indian livestock is 20-60 per cent lower than the global average because of a deficiency of feed, and that fodder alone constitutes 60-70 per cent of the milk production cost.

A Mother Dairy Fruit & Vegetable Pvt Ltd spokesperson told ThePrint that there has been a significant increase in the input costs, at the farmer level as well as at the manufacturer level.

“Due to the extended monsoon, the cost of feed ingredients like de-oiled rice bran, rice bran etc. have gone up, resulting in 25-30 per cent higher feed costs. It is pertinent to note that feed and fodder constitute almost 70 per cent of the total cost of milk production,” the spokesperson said.

R.S. Sodhi, managing director at milk cooperative Amul, concurred. “There has been a 35 per cent increase in fodder price. Earlier, the cattle food used to cost around Rs 10-12 per kg, which has gone up by Rs 18-21 per kg,” he said.

However, Sodhi didn’t agree with the fact that there has been substantial inflation in milk prices across the country. “There has been only an 8 per cent increase in milk prices in last three years, which is on the lines of consumer inflation,” he said.

State of India’s dairy sector 

In 2018-19, India’s dairy exports rose 126 per cent to 1,23,877 million tonnes (MT) — roughly estimated to be worth Rs 2,700 crore — from 54,828 MT in the previous fiscal year.

Among these, skimmed milk powder saw the largest growth at 292 per cent.

India is also the world’s biggest dairy industry in terms of milk production, according to the Agricultural & Processed Food Products Export Development Authority website. Last year, India produced close to 146.31 MT of milk, 50 per cent more than the US and three times as much as China.

Uttar Pradesh, Maharashtra and Punjab are the major dairy-producing states in the country.

Also read: When ’90s kids were getting drawn to cola, this Doodh ad made drinking milk cool again


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