The world prices for milk can significantly grow due to the violation of logistics chains and war in Ukraine, writes Financial Times.
According to the information, due to the logistics chains disturbed during a pandemic, prices for whole milk milk and anhydrous dairy fats increased. The most notable increase in prices was among the largest producers of milk in the world, in particular in Australia and New Zealand. The latter provides about 35% of global milk sales. In addition, Russia and Ukraine are one of the main fertilizer suppliers and grain necessary to provide livestock feed.
The publication notes that the war in Ukraine will increase the cost of production of milk, since both countries are leading exporters of nitrogen fertilizers and wheat, an important cattle feed on a par with corn and soy.
According to the publication, the growth of feed value is a big problem for dairy farmers, since it is 70-80% of costs. In combination with other negative factors, this has already led to problems in the five largest milk exporters in the world.
At the same time, manufacturers fear that war in Ukraine, sanctions against Russia and violation of world logistics will lead to an even stronger rise in price of dairy raw materials, which is one of the main products for the food industry all over the world.