Amul again hikes milk prices by Rs 3 a litre; fodder rates blamed

Gujarat spared; in milk, 80% of consumer price is passed on to farmers as procurement cost

The Gujarat Cooperative Milk Marketing Federation (GCMMF), which sells its dairy products under the brand name 'Amul', on Friday raised milk prices by Rs 3 a litre for all markets in India except Gujarat.

"We have increased the milk prices by Rs 3 per litre for markets other than Gujarat, such as Delhi, Kolkata and Mumbai. As of now, there is no increase in milk prices in Gujarat," Jayen Mehta, Managing Director of GCMMF told PTI.

The new prices are effective from Friday morning, GCMMF said in a statement.

With the increase in prices, a one-litre pouch of Amul Taaza milk will now cost Rs 54, while one litre of Amul Gold will be sold at Rs 66, the statement said, adding that one litre pouch of cow milk will now cost Rs 56, while Amul A2 buffalo milk pouch will cost Rs 70 from Friday.

The last time Amul and other major milk companies had hiked milk prices was just a few months back in October 2022. About 80 per cent of what consumers pay for milk is passed on to the farmers in the form of procurement price.

In the current financial year (FY23), milk companies have had to repeatedly increase milk prices at the retail level to compensate for the rising procurement cost which has gone through the roof due to high feed and fodder cost for the farmers. Feed and fodder prices account for 70-80 per cent of the milk production costs.

Even during the flush season, which starts in October with the advent of winters and ends around the beginning of March when daily milk supplies are usually 30 per cent more than normal, supplies have dried up this year. This is because high fodder cost and poor maintenance of animals during the Covid years has led to drop in procurement.

Fodder shortage was caused by a drop in wheat production due to an unusually warm rabi season and was also due to a spike in demand for maize from ethanol and starch makers plus general bullishness towards growing cereals. Wheat and maize are the two main sources of fodder.

Costly fodder, in turn, meant that farmers underfed their cattle while the Covid-19 pandemic had slowed the pace of artificial insemination, all of which seems to have contributed to a drop in per-animal milk production in this flush season, industry players said.

Fodder prices rose by 28 per cent in November year on year, the government said recently in Parliament.

The level of fodder inflation in November 2022 was the highest since June 2013.

In December 2022, according to official data, the index value for fodder rise by 28.66 per cent to 236.6 in December 2022, from 183.9 in the same month a year ago.

The fodder inflation in December 2022 was higher as compared to 4.25 per cent in the same month of 2021. It stood at 27.66 per cent in November, last year.

As per ICAR-Indian Grassland and Fodder Research Institute (IGFRI) in Jhansi has estimated that there were deficits of 11.24, 23.4 and 28.9 per cent in green fodder, dry fodder and concentrates, respectively. The deficit has worsened this year due to the near absence of maize, wheat and soybean and their record high prices.