In W23 in the dairy landscape, in Galicia in Spain, milk prices increased from USD 0.34/liter in Sep-2021 to almost USD 0.63/liter in Feb-2023, up 85.3% due to the sharp increase in the prices of the raw material. In Apr-2023, Galician milk was traded at USD 0.57/liter, USD 0.056 less than the price in Mar-2023, the largest MoM drop registered since Dec-2007 and a decrease of just over USD 13.97 million for 5.9 thousand Galician farms that are operational in the region. Furthermore, Galicia registered the largest drop in milk prices compared to Asturias and Castilla y León with a USD 0.054 decline while in Andalusia the milk price drop did not reach USD 0.043. According to the Ministry of Agriculture, Fisheries, and Food, April milk production in Spain as a whole fell 0.88% YoY, while in Galicia it dropped by 0.04% YoY. However, Spanish April milk production rose by 1.5% MoM, which is almost 4 million liters more than the volume produced by Galician farms.
INALE indicates that Uruguayan milk production stands at 2.2 billion liters per year, enough to feed 20 million people and 6 times more than the Uruguayan population, with a production that is obtained in only 5% of the national territory. 70% of Uruguayan milk production is exported, destined for more than 60 global markets, while 30% is for domestic consumption. According to the Mintec food commodity price database, from Nov-2021 to the beginning of May-2023, Indian milk prices rose from USD 0.56/liter to USD 0.64/liter and are not expected to decrease until Nov-2023. The milk price increase is due to higher feed costs, increased demand for ice cream, and a contagious cattle disease. India is the world’s leading milk producer, accounting for 22% of global milk production, followed by the US, China, Pakistan, and Brazil. India’s per capita consumption is around 0.44kg per person per day. This indicates that the rise in milk prices exerts downward economic pressure on Indians, the world’s biggest consumers of milk.
INFAGRO reports that, in May-2023, Ukrainian raw milk prices fell by 5-6% on average compared to winter price peaks, while EU raw milk prices dropped by 20-25% since Dec-2022. Also, the purchase price of milk from Ukrainian agricultural enterprises decreased by USD 0.011 on average in May-2023. According to INFAGRO, the estimated margin of raw milk production stabilized by 7%. As expected, despite the decrease in purchase prices for raw materials, the decrease in domestic market prices of concentrated feed balanced the estimated margin. Meanwhile, the Ukrainian number of cows in the industrial segment decreased by 0.8%, almost reaching the level of May-2022. Milk production at Ukrainian agricultural enterprises increased by 8.3% compared to 2022’s low base, with households reducing production by 12.6% YoY.
Rabobank reports that Argentine milk production in Q1-2023 was almost unchanged, with a slight decrease of 0.2% in volume. However, Rabobank expects a further contraction in Q2-2023 on the back of the ongoing dry weather in some regions, high production costs, and limited forage availability. According to OCLA data, the cost of milk production in Argentina stood at USD 78/liter in Apr-2023, compared to a farm-gate milk price of USD 89/liter, a slight improvement compared to Dec-2022 margin levels. However, profitability will decrease from May-2023 due to high prices and lower availability of complementary feed and forage. Meanwhile, Argentine milk exports in Q1-2023 decreased by 13% compared to Q1-2022, indicating a slow start to 2023. Brazil regained its position as the main destination for Argentine exports. This is partly due to the advantages of being a member of Mercosur and the higher comparable prices for milk in Brazil compared to other world markets. Lastly, since January 1st, in the Moscow region in Russia, over 260 thousand kg of milk have been received, with the average milk yield reaching 3.38 thousand kg per cow. This is attributed to the support from the state since dairy farming is being developed in the Moscow region. Also, the Russian government has provided 30 types of subsidies for dairy farmers, including support for purchasing agricultural machinery and equipment. In general, USD 62 million were allocated to them. At the end of 2022, the number of agricultural organizations in the Moscow region doubled, which achieved milk productivity from 10 thousand kg of milk.
