Just three days before the New Year, the Dairy Alliance group of companies have decided to make an unforgettable gift to all Ukrainian dairy farms – the collapse of prices for raw milk from January 1, 2022 by 10%. This was reported by the press service of the Association of Milk Producers (AMP)
In the "letters of happiness" on December 28, “Zolotonosha Dairy Plant”, “Yagotinskyi”, “Pyryatyn Cheese Factory” and “Bashtanska Cheese Factory”, which are members of the Dairy Alliance, call dairy farms "dear partners", cooperation with which is “highly valued”. However, this well-planned and agreed price démarche is far from the concept of partnership - the calculation is perfect: during the total New Year's holidays for 1-2 days, farms are unlikely to be able to challenge the proposal or reorient volumes.
The Association of Milk Producers has no doubt that the dairy industry is going through difficult times - precisely because dairy farms are in exactly the same situation! Rising tariffs on gas and electricity have raised the cost of milk production - just when farms have not recovered from the effects of the devastating drought of 2020. Most dairy industries operated with a negative profitability of -5-6% until October.
The price of mineral fertilizers increased 3 times in 2021 and, given the predictions of new gas tariffs, at the peak of planting season in 2022 the price will increase further. Due to the capacity problems of the Railways of Ukraine, the cost of railway logistics has increased 5 times - from UAH1000 to 5000 per hour. Expenditures on protein feed increased by 40-50%, the cost of home-grown feed - by 40%, veterinary medicines - by 25%. Finally, 2021 became the most unprofitable for dairy farms in recent 5 years due to the high cost of feed ingredients and means of their fabrication! In such conditions, a sudden collapse of raw milk prices by 10% for the vast majority of dairy farms and their work will be economically impractical.
In his Facebook post, the head of the Dairy Alliance Group Serhii Vovchenko called on farms: "let's reduce the price of raw milk by several percent for the period before the situation with gas prices stabilizes." "Several" means minus 10% in three days? In the same post: "We do not issue ultimatums, but only offer to jointly overcome this crisis". “Together” - means discussion and finding a solution. There is a situation when the enterprises of the Dairy Alliance simply bring farms in front of the fact. For the extremely vulnerable dairy market, which barely managed to suspend the slaughter of cows in the industrial sector in 2021, such drastic steps by either side are unacceptable!
That is why AMP's dairy farms turn to partner factories and, first of all, to the enterprises of the Dairy Alliance: let's react to threats quickly, but carefully, until the situation with gas prices stabilizes! To really JOIN this crisis dairy farms are ready to discus this situation and find a compromise, because we are in the same “boat”.
At the same time, let's speed up joint work on amendments to the law on internal trade for establishing fair market practices with networks. Let jointly promote the value added tax reduction on milk and dairy products throughout the production chain, so that despite of global product inflation, domestic dairy products remain available for everyday consumption for Ukrainians.Wednesday, 29 December 2021