The dairy sector is bracing for what experts call a ‘white flood’ — an overproduction of milk — thanks to unusually heavy pre-monsoon rain in May.
Karnataka has recorded a 24% increase in rainfall so far, and the trend is likely to continue into the rainy season with IMD predicting 106% increase between June and Sept. This surplus is expected to result in an overproduction of milk, primarily due to growth in fodder production.
While this is welcome news since drought and dry weather in the preceding months had hit dairy farmers hard, on the other it raises concerns over oversupply. Karnataka Milk Federation (KMF) may face challenges in procuring more, leading to a decrease in demand and potentially impacting milk prices negatively.
Experts predict a significant surge in average daily production, potentially surpassing the normal output of 85 lakh litres, as observed in 2018-19. Authorities have been cautioned to devise strategies to mitigate impending distress which both milk producers and traders could face.
The looming glut could also impact govt incentives for farmers. The state typically pays an incentive of Rs 5 per litre, while KMF procures milk from 14 regional milk unions at rates ranging from Rs 33 to Rs 35 per litre, depend- ing on fat content. The delay in disbursing these incentives could result in financial strain on dairy farmers.
“On the one hand the govt is yet to respond to the demand of milk producers to hike incentive by at least Rs 2 and on the other their dues are pending for close to three quarters,” said Rajkumar HP, chairman, BAMUL (Bangalore Milk Union Ltd) which covers Bengaluru Rural, Ramanagara and Chikkaballapur districts.
MK Jagadish, managing director, KMF, said procurement has already risen from a daily average of 75 lakh litres to 88 lakh litres. He anticipates milk inflow to surpass the one crore-litre mark. “We expect record production, and we are taking steps to ensure procurement matches increased supply,” said Jagadish.
Pressure is also mounting to boost sales amid competition from private agencies. To address this, KMF plans to increase milk powder production, which can be stored for six months and released when price increases.
