Russia’s dairy sector sees 3% growth in raw milk production

RUSSIA – Russia has experienced notable growth in its dairy sector, with raw milk production increasing by 3% to reach 13.2 million tonnes in the first half of 2024, according to Soyuzmoloko, a leading dairy industry association. 

According to the report, the positive trend showed an upward trajectory across various segments of the Russian dairy market, which had previously displayed mixed results.

Cream production surged by 23% to 146,500 tonnes, while cottage cheese output rose by 9% to 334,500 tonnes. 

Additionally, yogurt production climbed by 13% to 330,600 tonnes, and the ice cream sector expanded by 14%, reaching 260,300 tonnes. 

Other categories, such as sour cream and kefir, recorded modest growth of 2% and 1%, respectively, while cheese products saw a slight increase of 1% to 85,000 tonnes. 

Artem Belov, general director of Soyuzmoloko, highlighted the role of stable raw milk prices throughout 2023 in supporting the industry. 

Despite rising prices in other food sectors, such as a 61.4% increase in egg prices, dairy products have helped mitigate overall food cost inflation,” he said. 

By mid-2024, raw milk production had already grown nearly 4%, with dairy product prices generally trending upward.”

Meanwhile, the financial outlook for the Russian dairy sector appears robust. In 2023, the top 30 dairy producers generated a combined net profit of US$9.44 billion, reflecting a 10.1% increase from the previous year. 

Wimm-Bill-Dann emerged as the market leader, reporting revenue of US$1.51 billion. 

This shift follows the deconsolidation of Danone’s former Russian business, Health & Nutrition, which has altered market dynamics.

Despite the strong performance of the dairy sector, the Russian Agricultural Ministry has warned that profitability across agricultural sectors is nearing levels that could deter future investment.

Nevertheless, the dairy industry remains a key contributor to the agricultural economy, outpacing other sectors in growth and profitability.

Additionally, the volume of dairy imports to Russia remained stable in 2023, with approximately 877,000 tonnes imported, mainly from Belarus, which holds a 94% market share. 

The country also exported 215,000 tonnes of dairy products in 2023, marking a 9% increase from the previous year. 

Experts predict continued growth in domestic consumption and exports throughout 2024, as the industry adapts to economic challenges and seeks new market opportunities, particularly in North Africa and Southeast Asia.

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