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Milk prices moving up in Maharashtra as summer time is approaching

As the government started easing up the lockdown, demand made a slow but steady return and procurement prices started picking up across the state

For dairy farmers, the pandemic induced slowdown is not only over but dairies have now started their farmers paying more than the pre-Covid milk procurement rates. With dairies now paying their farmers anything between Rs 27 and Rs 31 per litre for milk with 3.5 percent fat and 85 percent SNF (solid-not-fat), this can be the start of a long-drawn price war in the sector, something which will benefit the farmers.

On Thursday, dairy giant Sunfresh Agro Lactialis (owner of brand Prabhat) announced an increase of Rs 1 per litre from their present procurement price of Rs 29. At present, the dairy, which procures mainly from farmers in Ahmednagar, Pune and Nashik, is paying the highest rates in Maharashtra – Rs 30/31 per litre of milk.

Rajiv Mitra, chief executive officer of the dairy, called this move a correction for last year’s pandemic-induced losses of farmers. “Unfortunately, last year dairy farmers suffered due to much reduced demand for dairy products and ingredients, induced by the severe lockdown. Now as Covid-19 recedes and markets open up, the first thing we want to do is pass on the benefit to the farmers. Hence the move has been initiated. I expect the markets to further respond favourably and all other operators are able to follow us and offer reasonable price to their farmers,” he said.

The Pune District Milk Producers’ Cooperative Union (the dairy which owns the brand Katraj) hiked their procurement price to Rs 27-28/ earlier this month.

An almost 20 per cent dip in milk procurement in the state is responsible for this steep price rise. At the start of the pandemic, dairies were getting ready for a price war with most paying their farmers in the range of Rs 26-27. However, as demand slumped and milk turned surplus, most dairies took to slashing their procurement prices. Prices in Maharashtra had dipped to around Rs 20-21 at the peak of the pandemic.

As the government started easing up the lockdown, demand made a slow but steady return and procurement prices started picking up across the state. Many farmers, however, had either reduced their herd or cut down on feed and supplement which took a toll on their milk production.

On the other hand, prices of commodities like skimmed milk powder (SMP) and white butter have increased which have seen dairies scrambling to corner as much milk as possible. At present, the SMP is retailing at Rs 250-270/ per kg, while white butter is priced at Rs 300-320.

RS Sodhi, managing director of the Gujarat Cooperative Milk Marketing Federation (the cooperative giant which sells its milk and dairy products under the brand Amul), said India has around 1.5 lakh tonnes of SMP and 50,000 tonnes of fat with various dairies.

While dairies in Maharashtra have talked about a procurement dip, Sodhi said they have seen their collection increase by 17 per cent to the present 295 lakh litres. “Overall, there is a dip in milk production in the country but Maharashtra’s dip is quite sharp,” he said. The present price range is expected to continue till the start of the next flush season later in October.

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