LPG Crisis Halves Milk Sales for Dairy Farmers

Dairy farmers in Madhya Pradesh are facing severe disruption as an ongoing LPG shortage—linked to global supply tensions—has cut milk sales by nearly 50%, forcing distress selling and operational challenges across the value chain. A ground report from Indore highlights that a typical farm producing around 1,000 litres of milk daily (600 litres own + 300–400 litres procured) is now struggling as bulk buyers like sweet makers and processors have stopped purchases.

India imports around 60% of its LPG, with nearly 90% routed through the Strait of Hormuz, making supplies vulnerable to geopolitical disruptions. Despite measures such as 20% additional allocation of commercial LPG and deliveries of ~92,700 metric tonnes in mid-March, shortages persist, impacting dairy operations dependent on gas for processing.

Farmers report falling realizations, with milk earlier sold at ₹55/litre (buffalo) and ₹40/litre (cow) now diverted to powder manufacturers at ₹10–15/litre lower prices, while input costs remain unchanged at around ₹450 per animal per day. Labour shortages have also emerged, with workers leaving due to lack of LPG for cooking, further increasing workload and costs.

With limited rural infrastructure to convert milk into value-added products like ghee or khoa, and reduced demand from institutional buyers, the crisis is exposing deep vulnerabilities in India’s dairy supply chain—where energy access is directly linked to milk market stability and farmer profitability.

Source: Dairynews7x7 28th March, 2026 Read full story here

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