Indore Milk Union Raises Farmer Procurement Rates

The Indore Cooperative Milk Union has raised the purchase price of milk from farmers by over 2%, moving from ₹820 to ₹840 per kg of fat, effective September 11, 2025. This decision comes at a time when the union is also expanding its reach by forming 550 new milk committees, increasing the total from around 1,658 to 2,208 in the region. Current milk collection from existing committees stands at about 2.8 lakh litres per day, and the expansion is expected to bring nearly 14,000 new dairy farmers into the union’s network. This simultaneous price hike and expansion signal a clear intent to strengthen farmer loyalty and build a robust supply base for the future.

Other major players have taken similar steps in recent months to align procurement and consumer prices with rising input costs. Sanchi, the brand marketed by the same union, had already raised its packaged milk prices by ₹2 per litre earlier this year, taking the full-cream gold variant to ₹67 for a 1-litre pack and ₹34 for 500 ml. Private sector players like Amul and Mother Dairy have also increased prices by ₹2 per litre across several variants in Madhya Pradesh and neighbouring states to offset rising feed, procurement, and transportation costs. This creates a competitive but supportive pricing environment for dairy farmers across the region.

The price increase benefits farmers by improving returns at a time when fodder, fuel, and input prices remain elevated, making dairy farming more sustainable and attractive. The formation of new committees is expected to improve milk collection efficiency, strengthen cold chain infrastructure, and ensure better quality monitoring. With milk collections already at 2.8 lakh litres per day, the Indore Union is set to scale operations, improve its cost efficiency, and possibly expand its product portfolio, including packaged milk and value-added dairy offerings.

By increasing farmer procurement prices without immediately hiking consumer rates, the union has struck a balance between supporting producers and maintaining market stability. However, if procurement costs continue to rise, retail prices for packaged and loose milk could eventually be revised upward. Going forward, the sustainability of margins will depend on effective management of input costs and government support for infrastructure development. Competition from other unions and private dairies could also lead to further procurement price increases, intensifying pressure on retail prices. Nevertheless, the Indore union’s proactive strategy positions it strongly to take advantage of growing demand while ensuring farmer participation and loyalty remain at the heart of its model.

Source : Dairynews7x7 Sep 13th 2025