Soyuzmolok called the increase in the key rate the reason for the increase in milk prices

“The reason for the adjustment in prices for dairy products is the increase in production costs throughout the entire chain due to the increase in costs of all key items (wages, feed, energy resources, equipment maintenance) . An important factor in the increase in costs in 2024 was the increase in the key rate of the Central Bank of the Russian Federation and the subsequent increase in rates on attracted credit resources. At the same time, the cost of production of dairy products is growing faster than sales prices,” the producers’ association informed RB.RU.

According to Soyuzmolok, the price situation observed during the autumn in the market for finished dairy products is due to the cumulative influence of market factors on the development of the dairy industry and will stabilize as the balance between supply is restored and the demand.

Dairy companies will increase raw milk production, build new farms and modernize existing ones.

“Taking into account the long recovery times of projects and the high investment capacity, affordable loans and other government support measures for the raw materials sector are needed,” the producers’ association concluded.

• On November 12, Vedomosti wrote that the largest milk producer, Wimm-Bill-Dann, warned retailers about a November 1 price increase for this product of 3.4%. The company attributed this to “accelerated price increases” for raw milk “under the influence of external factors,” including “record levels” of wholesale prices and increased demand for the fat component of milk for butter production.
• Subsequently, the Prosecutor General of Russia, Igor Krasnov, ordered to verify the information about the increase in milk prices by producers. The Prosecutor General’s Office organized an inspection that is carried out with the participation of the Federal Antimonopoly Service of Russia, the Ministry of Agriculture of Russia and the Ministry of Industry and Trade of Russia. “Taking into account the special social importance of dairy products, the prosecutor’s office will make a fundamental assessment of the actions of commercial entities,” Krasnov said. The supervisory authority did not specify which companies raised prices.
• The Central Bank’s key interest rate was immediately increased by 200 percentage points. – up to an all-time high of 21% annually at the meeting of the Board of Directors of the Bank of Russia on October 25. The mega-regulator explained its growth as an attempt to “return inflation to target” and reduce demand, which is outpacing supply. RB.RU experts do not rule out a series of bankruptcies of companies that will not be able to cope with the increased cost of borrowing.
• Soyuzmoloko unites 149 organizations, including agricultural holdings Krasny Vostok, EkoNiva, Trio, Olam, Agropromkomplektatsiya group of companies, Molsib, processing companies PepsiCo, Karat, Efko, Lebedyanmoloko and others.