Good monsoons-Karnataka Braces for Milk Production Surge

Following 60% excess pre-monsoon rainfall in Karnataka and forecasts of an above-normal rainy season, milk production is expected to surge again this year. Karnataka Milk Federation (KMF) is anticipating daily milk inflows to peak at 1.2 crore litres by July-August, significantly above the typical 85-92 lakh litres. Bengaluru's Bamul union alone expects to cross 18.5 lakh litres daily. While favorable rains have improved fodder and water availability, this overproduction poses serious challenges.
In 2024, surplus milk forced KMF to convert excess milk into skimmed milk powder (SMP) at a cost of ₹240/kg, while market prices remained around ₹120/kg, leading to financial losses. A similar situation could recur unless corrective market linkages are created. Milk unions fear they may have to discourage procurement or reduce farmer payouts, intensifying farmer distress.
Sector leaders are pressing the Karnataka government to raise the milk incentive from ₹5 to ₹7 per litre, fulfilling an earlier political promise. Industry voices also suggest that KMF should aggressively pursue export opportunities and expand its range of value-added dairy products like curd, ghee, and condiments to manage the surplus and stabilize farmer incomes.

Industry Insight:
Karnataka’s dairy sector faces a classic overproduction dilemma — without proactive export strategies and expanded domestic demand, both cooperative margins and farmer incomes could come under severe pressure during the peak season.

Source : Dairynews7x7 April 26th 2025 TOI