With the collapse of the Soviet Union came the collapse of the dairy industry in what is now Russia. USDA’s Moscow bureau warns that Russia will not be able to stabilize the country’s milk production, now predicting that the country’s production will fall to levels last seen in 1988.

The official yearly estimate was originally 31.4 million tons of milk, but now that’s been revised to 30.5 million. That amount would be 1.16 million tons less than last year.

Shortly before the end of communism in the region, milk output spiked to 54.5 million tons a year.

China, NZ, EU, up             

The Russian dairy industry fallout is contrasted by a predicted 5% milk production growth in China, 10% in New Zealand, 5.6% in Australia, and 3.7% in Europe.

The Moscow bureau allocated the drop to weaker finances in the country, as grain production is also expected to fall throughout the region. Russia’s subsidies for livestock are down 35% from last year, despite interest rate subsidies of 100% (up from 80%) there are a lack of funds available. 48% of milk in the country comes from “household” production.

But the drop doesn’t mean imports will rush in, according to the bureau, as price increases are expected to lower fluid milk and skim milk powder consumption.

The region’s turmoil is already affecting Ukraine, where the Ukrainian Agribusiness Club warned last month that 100,000 head may be slaughtered.

Source: Agrimoney.com