Source: USDA, Rosstat
Domestic milk production constrained
Russia is estimated to have produced 30,661 million tonnes of raw milk in 2013. The USDA estimates production to decline to 29,900 million tonnes in 2014, and lower still to 29,300 tonnes in 2015.
Small-scale farms, which produce just over half of the milk in Russia, are said to face tough competition from the larger, government-subsidised, 'agricultural establishments'. The report indicates that overall milk production will decrease as a result of the small-scale farms exiting the industry, despite increased efficiency from the larger-scale farms.
The Russian National Union of Milk Producers (Soyuzmoloko) has put forward a proposal to increase domestic milk production, to reach a 78% share of domestically available dairy products by 2020 (up from 67%). The plan is estimated to cost over US$10 billion of state support. At this point whether or not the plan will be adopted by the government is uncertain.
Fluid milk imports rise, but less cheese and butter to be found
The USDA forecasts imports of fluid milk to increase by 14% to reach 375,000 tonnes. The gains come largely from Belarus, volumes from which have more than offset the declines from other sources which are now banned due to Russia's food import ban which began in August this year.
Cheese imports are forecast to decline by 37% to 230,000 tonnes in 2014. This is compared to 364,000 tonnes in 2013. The lesser supply as a result of the August 2014 ban will be only partly met by imports from other suppliers and higher domestic production.
The same applies for butter imports, which have been forecast to decline by 12% to 120,000 tonnes this year. Imports in 2013 reached 136,000 tonnes.
