Milk Teeth Ukrainian Dairy Plants Have Too Little Power To Be Effective

The largest dairy plant in Ukraine processes 400 tons of milk per day, while it is efficient to process from 1000 tons. This is stated in a study published on Agravery.

In addition, according to the World Bank, the average processing plant in Ukraine has a high level of fixed costs. All this reduces profitability and causes a drop in procurement prices for milk.

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 But the European experience shows that the large scale allows them to save and be more competitive.

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Now the purchase prices for milk in Ukraine are falling. Farmers complain to the Antimonopoly Committee and blame it all on the processors. The fact that the feed is rapidly becoming more expensive also adds fuel to the fire and the feed accounts for up to 70% of the cost in the structure of the cost of milk.

But factories can not always give a high price. “To make a profit by producing a pair of dry milk-oil, raw materials should be bought at 8 UAH / liter, and for producers, it is below the cost level,” says Elena Zhupinas, the Milk Producers Association consultant.

The expert believes that the main contradiction in the relations between producers and processors is that the level of development of the former is much ahead of others. Basically, farms have made a significant leap. But for a long time, the processors counted on cheap milk from the population. As a result – 60% of milk process 10 companies of 218 processors, and operate 31 plants.