Russian Milk Production Market in 2023 - Tendata

tendata blogMarket Insights

ten data blog20-05-2024

In 2023, total global milk production (including milk from other agricultural animals) was 986 million tons, with more than 569 million tons of raw milk produced. In comparison, cheese and butter production in the same year exceeded 220,000 tons and 11 million tons, respectively.

Russia is the world's fifth largest milk producer. The U.S. Department of Agriculture's (USDA) July report, “Dairy: World Markets and Trade,” shows that in 2023, milk production is expected to increase from last year's levels in China (up 4.6%), Brazil (up 3.6%). India (up 2.6%), New Zealand (up 2.1%), Mexico (up 2.1%), the US (up 0.9%), the UK (up 0.6%) and Russia (up 0.5%). Milk production is expected to decline in Argentina (down 2.6%) and the EU (down 0.3%).

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Russia in the Global Dairy Market by the End of 2023:

5th in the world in milk production, after India, the EU, the US and China; 3rd in the world in cheese and cheese production (1.18 million tons); 5th in the world in butter production (314,000 tons); 9th in the world in the production of skimmed milk powder (111,000 tons); and 9th in the world in the production of whole milk powder (69,000 tons).

Russian Dairy Products Market

Since 2017, Russia's raw milk production has been growing year-on-year. According to Rosstat, the country's production of all types of milk has increased by 9.3% over the past six years to 33 million tons.

Between January and October 2023 alone, Russia's total milk production exceeded the year-ago level by 4.2% to 21.7 million tons. The main production is still dominated by large-scale farms.

The dairy sector remains attractive for investment. Mainly due to the implementation of new projects in agriculture, milk production is growing steadily at an average annual level of 3-3.5%, with large-scale farms (former collective farms) already growing at nearly 7% this year. According to the Milk Union forecast, by the end of January-December, milk production in Russia will grow by 3.5% (+900,000 tons) to 25.4 million tons.

The leading federal district in the Russian Federation in terms of milk production is the Volga Federal District (28% of production in the period from 2018 to 2023), and the second place is the Central Federal District (23.6% of production).

The highest total milk production in January-June 2023 was recorded in the Republic of Tatarstan (1.1 million tons; 8.6% per year), Krasnodar Krai (884,700 tons; 8.9% per year) and the Republic of Bashkortostan (833,700 tons); plus 1.2%). Since 2011, these regions have remained among the top three dairy-producing regions. Such a result can be achieved by a large number of dairy cows: these regions are among the top eight in the Russian Federation in terms of the number of dairy cows.

Overall, the Republic of Tatarstan, the Udmurt Republic, the Krasnodar Krai, the Voronezh region and the Kirov region have the highest volumes. The average daily milk yield of a cow was 20.4 kilograms, which is 1 kilogram more than in the previous year.

The most productive regions for dairy cows were St. Petersburg, Leningrad, Kursk and Kaliningrad regions. In these regions, each cow received more than 26 kilograms of milk.

At the same time, the number of cows in Russia continues to decline. Thus, according to the Rosstat report “Socio-economic situation in Russia in the first nine months”, the stock of livestock on all farms at the end of September amounted to 17.9 million heads, which is 1.5% less than in the same period last year. At the same time, the decrease is more significant compared to the estimated stock of 18.2 million heads at the end of May. The stock of agricultural producers decreased by 1.3%. As for the daily volume of milk sold by agricultural producers, according to the Ministry of Agriculture, at the end of October the index stood at 52,800 tons, which is 23,000 tons or 4.6% more than in the same period last year.

Along with the increase in the production of raw milk in Russia, a positive trend in the production of dairy products has been observed.In 2023, Russian dairy companies produced 5,735,606 tons of dairy products, which is 12.6% more than in 2022.The average annual growth rate (CAGR) of the production of milk (other than raw milk) for the period 2018-2023 amounted to 1.4%.

Imports and Exports

Russia remains a net importer of dairy products, although imports decline in 2022-2023 due to the withdrawal of many foreign partners from the domestic market.

In 2023, more than 40 countries import Russian dairy products. The majority of dairy products are sold to Kazakhstan (42.5% in volume and 46.7% in value), Belarus (13.7% and 13.4% respectively), Uzbekistan (8.9% and 8.5%) and Azerbaijan (5.9% and 5.5%).

Due to the increased production of milk and dairy products, it is important for Russia to expand export sales channels and develop new markets, especially in the Middle East and Africa.In 2023, Russian companies will be able to supply milk and dairy products to Pakistan. The list of Russian companies eligible to export to Egypt, China, Saudi Arabia and other countries continues to grow. At the same time, China, which ranks first in the world in terms of total imports of butter, skimmed milk powder and whole milk, remains a vast market for Russian products.

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