The Ukrainian dairy industry is in crisis. We are expecting an increase in the price of the «milk basket»

The head of the «Union of Dairy Enterprises of Ukraine» Vadym Chagarovsky recently emphasized that the dairy industry has been in a deep crisis for six months and has been operating at a loss. According to the expert, a further increase in energy prices will lead to the suspension of milk processing enterprises. At the same time, the prices of dairy products have increased significantly in recent months. For example, the price of 900 ml of milk increased by UAH 1, and a kilogram of cheese went up by almost UAH 5.

 

According to experts, this trend will continue and spring price tags on such products may add a few more percent.

 

First of all, this situation is connected with interruptions in electricity supply, as well as the increase in the price of raw materials and, in fact, electricity. Therefore, for example, according to the director of the dairy plant «Yuriya» («Voloshkove pole» TM) Vitaliy Pustovit, the cost of 1 liter of milk will increase by UAH 1. According to a publication on the Latifundist.com portal, if you break down the costs of a dairy plant, the main article is raw materials (70%). The rest (30%) includes energy and other costs. At the same time, the share of the energy component is growing, and currently another increase in the price of electricity should take place.

 

«We will have to spread it to the final prices. It has not been increased yet, but this issue is under consideration. The price will increase by about 5%,» noted Vitaliy Pustovit.

 

He added that farmers are raising the price of milk and «if you translate this increase along with the cost of delivery and other costs, the price of milk will rise by about UAH 1».

 

It is worth noting that prices for dairy products largely depend on large retailers (supermarket chains). They sign contracts with manufacturers, which also specify prices. And in order to raise the price, you have to negotiate with retailers and renegotiate agreements.

 

Supermarkets are always against such an initiative: they are interested in keeping their markup and offering products at lower prices than competitors. Therefore, at present, the cost of production has increased, and prices are rising with a delay.

 

Analyst Vasyl Vintonyak noted that this price increase, which exists, often does not cover all costs.

 

«Some even work at a loss. They would pay off by raising prices for retailers, but the latter are very difficult to convince. There are several operators and they are very reluctant to raise prices. This goes on for months, and if they raise it, then the increase is by 2-3% in a few months,» he explained.

 

Therefore, the expert is confident that the prices of dairy products will continue to rise in the spring. According to his estimates, we are talking about an increase of 3-4%.