What are the factors driving the increase in milk prices?

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What are the factors driving the increase in milk prices?

  • Prices of milk has been hiked recently and many dairy companies across the country have signalled that they would follow suit.

Factors behind the increasing milk prices

  • Fall in production: Dairies across the country are reporting a shortfall of 8-10% in milk collection.
  • Rise in cattle feed cost: The reduction in milk yield has come on the back of rising cost of cattle feed.
  • Heavy rainfall in several parts of the country has resulted in lower green fodder yield.
  • Protein and mineral mixtures have also seen a rise in prices, which has increased the cost of cattle feed.
  • Cost of production of milk has gone up. Cattle feed cost alone has gone up by over 25%.
  • Disease in cattle: Some major milk-producing states have seen a rise in cases of disease among cattle.
  • Lumpy Skin Disease, which leads to fall in milk output, has been reported in Gujarat, Punjab and Haryana

Other factors

  • Rise in transport, logistics, manpower, and energy costs.
  • Due to the rise in input costs, milk procurement rates have increased by 15-25% over the same time last year.
  • Demand-supply mismatch: Most dairies in the country are short on their supply of skimmed milk powder (SMP) and white butter.