Russia: Dairy and Products Annual
For the first time in at least a decade, milk production became more profitable on average than poultry or grain production in Russia. Global high prices for milkfat, the stronger ruble, and reduced cost of capital allowed local producers to improve margins, and encouraged greater production of dairy products. However, soft demand at the consumer level persists. The resulting high stocks of butter, Whole Milk Powder (WMP), and Skimmed Milk Powder (SMP) will likely limit further production growth in 2018 until continuing economic improvement for consumers rebalances demand with supply later in the year. Market consolidation and greater efficiency at commercial dairies increase with investor interest in the sector, but imports remain high for now.
