The State Duma called on the population to prepare for an increase in milk prices. Producers publicly announce a sharp increase in costs, primarily due to the cost of raw materials, and are already negotiating new price tags with retail chains. The Ministry of Agriculture speaks of a stable position in the market and is trying to cope with rising prices for dairy products by injecting state money into the sector.
However, the coming price crisis could have been foreseen last fall, experts say. «Novaya» understood the reasons for the rise in prices for a strategic food product and whether it could have been prevented.
One of the leading manufacturers of dairy products, Danone, which owns the Prostokvashino and Activia brands, has notified retailers of an increase in the price of part of the assortment by almost 10% since February, Kommersant reported. Other manufacturers, as well as milk processors, warned about the upcoming price increase, for example, the Progress company, the owner of the FrutoNyanya baby food brand. The Valio holding (Viola brand) has also recognized the need to raise prices.
What's going on?
Over the past year, milk production itself in Russia has risen in price by an average of 15‒16%. Processing also increased in price — by 14‒16%, Soyuzmoloko CEO Artem Belov told Novaya Gazeta. /02/2577e1c7366afaf5ae1825ab9df4e94e.jpg» />Whose feeder
Cows, of course, are not to blame. The cost of a package of milk was also affected by the rise in price of building materials, and mineral fertilizers, electricity, fuel, and inflation. But above all, a jump in the price of feed and additives to them.
“The price of oilcake (concentrated feed with a high protein content. — Ed.) increased by 48% over the year, compound feed for cattle — by 25%, feed grain — by 20%, some mineral fertilizers increased in price by more than 100%, «- lists the director of Soyuzmoloko Belov.
In one of the largest Russian dairy enterprises, Novaya Gazeta was told that
the share of feed in the cost of 1 liter of raw milk can reach almost 50%.
Over the past year, feed for animals have risen in price by 1.5 times, while raw milk — by only 3%. Dairy producers simply have nothing to cover these costs. Cows cannot be fed, they are simply sent to slaughter.
Do not lag behind in price and vitamins with feed additives. “You can, of course, feed with grass alone, but animals need a lot of protein. If on one hay, the milk will be liquid, not for sale, ”explains one of the producers in a conversation with Novaya.
Most of the feed additives and raw materials for them are imported into Russia from abroad. Production is high-tech, and we have practically no such technologies. The main suppliers are the EU countries and China.
Some feed components are imported to Russia almost exclusively from China:
lysine, choline chloride, gluten and threonine. But in China, production is declining due to the decision of the authorities to limit energy consumption. This, in particular, is stated in a study by the Research Institute of Physics under the Ministry of Finance of the Russian Federation, which Novaya got acquainted with. This study, by the way, was ready BEFORE the issue of rising milk prices became acute.
In conditions of acute shortages, prices are rising, and, as manufacturers say, there is nothing to replace Chinese additives.
< p>The Ministry of Agriculture, in response to a request from Novaya, nevertheless reported that today the industry is fully provided with all the components for a full-fledged diet for feeding dairy cattle, including high-protein feed. At the same time, part of the amino acids and vitamins is supplied to the Russian market through imports.
Dmitry Patrushev, head of the Ministry of Agriculture, told the president how much domestic milk producers depend on foreign feed additives. According to him, most of the amino acids (50%), feed additives and microelements (90%) and vitamins (almost 100%), without which it is impossible to keep livestock, are imported to Russia from abroad.
It is impossible to keep dairy cattle in Russia without importing raw materials. Photo: RIA Novosti
In September 2021, the Ministry of Agriculture of the Russian Federation approved the program for import substitution of feed and additives. For these purposes, the Russian government allocates 2.8 billion rubles from the federal budget and the same amount from extrabudgetary sources.
The program is designed for 2022‒2030 and will not affect the current price crisis in any way.
In December 2021, the Ministry of Agriculture allocated 10.6 billion for a lump sum payment to market participants, they promised to find the same amount for livestock breeders this year.
But all these measures seem to be more like putting out a fire that has already flared up. And this fire was inevitable.
Russia's food security depends on China
One of the tasks of the Ministry of Agriculture is to control the provision of Russians with essential products, including milk, as well as the affordability of prices for these products. This is spelled out in the food security doctrine approved by the ministry in early 2020.
According to the document, 90% of the milk consumed by Russians should be provided by domestic producers, and this product should be available. Moreover, one of the tasks of state policy in the doctrine is the stabilization of prices for basic foodstuffs.
help
About 14% of the milk bought by Russians is brought from abroad. The main importer of milk in the country is Belarus (77%), a significant share falls on New Zealand and Argentina (8 and 7%, respectively). In total, in 2020, Russia purchased 6.8 million tons of dairy products. Imported milk for Russia is also becoming more expensive. In early February 2022, the Belarusian authorities raised the minimum recommended export prices for a number of categories of dairy products for the Russian Federation. The increase applies to dry skimmed, dry whole milk and cheeses — their prices will increase by 5 rubles, follows from the documents of the Ministry of Agriculture and Food of the Republic of Belarus.
Russia is also an exporter of dairy products, however, 10 times less milk goes abroad than we buy from other countries.
In fact, the doctrine of the Ministry of Agriculture of the Russian Federation from 2020, in theory, took into account the recommendations of the Food and Agriculture Organization of the United Nations (FAO), according to forecasts of which the growth of world milk production in 2020 will slow down, and the volume of trade will fall by 4% for the first time in 30 years. The same report predicted a reduction in imports of dairy products due to logistics problems caused by the COVID-19 pandemic.
That is, they knew about the upcoming crisis in the dairy industry.
But the measures taken to stabilize the market were not enough, and some of them, according to experts, even had the opposite effect. «SingleImage_image__3qIDn» alt=»» />
Milk processing. Photo: RIA Novosti
Ivan Starikov, director of the All-Russian Research Institute Ecology, a former deputy and deputy minister of the Russian economy, believes that the current price crisis could have been predicted at the beginning of the pandemic. At the same time, he agrees that the Russian agro-industrial complex is highly dependent on foreign markets.
“I am not a conspiracy theorist, but we are really fatally dependent on serious foreign technologies. Today's agricultural technologies are long distributed value chains. Russian agriculture is at the very end of these chains. We take the intellectual property of large international consortiums, such as seeds, germplasm and pesticides and even machinery, and incorporate it into our processes. But the main profit remains outside of Russia,” says Starikov.