Milk Production Expected to Increase This Year

Amid the expectations of a normal monsoon, the global agriculture information network (GAIN) has made positive forecast of India’s overall fluid milk production for the calendar year (CY) 2020 compared to 2019. The assessment suggests that in comparison to CY 2019’s 191 million metric ton (MMT), the CY 2020 may go as high as 195 MMT, which is a good news for Indian consumers.

This is a positive news for some 80 million rural households who are engaged in milk production as a source of their livelihood. The majority of these rural households are small or marginal farmers and also landless. For farmers, start-up costs are lower and cash flow is steadier in dairy farming than with seasonal planted crops and this is also helping governments diversification mission. However, unlike the larger herd sizes of leading milk producing countries in the world, some 95 per cent of milk producers in India hold just 1 to 5 milch animals (the animals that are farmed for the production of milk) per household, which makes this little more than a subsistence-level farming system.

Whiles the dairy farms sized from 50 to 200 cattle are increasing in some of the major dairy producing states such as Punjab, Gujarat, Maharashtra, and Telangana - Andhra Pradesh, although they are still few in comparison to rising demand of the dairy products. Increasing disposable incomes per capita, rapid urbanization, changing lifestyles, dual income households, and other demographic shifts are driving the demand for processed or value-added dairy products. Out-year non-farm dairy milk (NFDM) exports are projected at 15,000 metric ton (MT).

Butter exports are also expected to slightly improve and may remain at 55,000 MT on expectation of moderate export demand. Suggests the forecast by GAIN. Also the demand side and exports may have a mix response with NFDM production levels are estimated at 660,000 MT on growing domestic demand for reconstituted milk during the lean season and expectations of moderate export demand. Similarly, combined butter and ghee (clarified butter) production will rise to 6.1 MMT against 5.8 MMT last year on strong consumption demand.

Despite the growth, a few challenges must be addressed to optimize growth in the Indian dairy sector. A few such challenges are low milk productivity of Indian bovine animals relative to those of developed countries; insufficient feed and fodder resources; poor access of milk producers to the cold chain; and an inefficient cold chain network. Though government has once again pushed for the improvement of cold chain networks in the union budget 2020-21. Amid fears with US president’s recent visit to India and a possible import relaxation for US dairy produces due to US pressure on India, talking to BW Businessworld Pushpendra Singh, president of Kisan Shakti Sangh also suggested an MSP type regime for fluid milk produces.

Though the rising milk production or any spike in domestic demand may still force India to go for imports of dairy products. Since the milk production is just enough to meet domestic consumption (fluid and industrial use), any uptick in future demand for milk-based products may be filled through imports, which are currently restricted for the United States due to a veterinary health certificate requirement. But one thing is for sure that domestic consumers may not be milked during CY 2020.