Powdering milk for cold cash!

MILK IS going ?dry? this festive season. Don?t be surprised! It?s not that there is any shortage of milk in the local markets. But that milk farmers alone know which side of their bread is buttered.

MILK IS going ‘dry’ this festive season. Don’t be surprised! It’s not that there is any shortage of milk in the local markets. But that milk farmers alone know which side of their bread is buttered.

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Dairy farmers in and around the city are converting a third of their milk output into powder to mint money. Sources say there has been a nationwide shortage of powder, which has sent milk farmers on a profit chase for past one week.

Most of the farmers in rural Uttar Pradesh have already started cutting milk supplies to the dairies. They are holding back the output for bulk manufacture of milk powder—a far more lucrative business proposition than a kg of milk sold by them at the rural milk collection centres.

The soaring prices of milk powder had already led to marginal hike in the prices of both Parag and Amul brand of half and one litre milk packets by 50 paise at the retailer’s end as most dairies have been receiving lesser output of milk for the past one week from dairy farmers.

“There is no shortage of milk during the festive season but the spurt in milk powder prices from Rs 85 to Rs 130 per kg has certainly contributed to rise in milk processing costs”, says general manager Parag Dairy S K Prasad.

The Parag dairy had been procuring milk at the rate of Rs 16 a kg from the farmers with a profit margin of a mere 35 paisa for a kg of milk sold to the retailers. The consequent rise in the cost of milk by 50 paise per kg had taken place after retailers added their margin to the product when sold to the consumers, he says. The tendency among farmers across the country to focus more on manufacturing milk powder has also affected production of dairy products such as butter which is currently in short supply in the state.

“The Parag dairy had temporarily suspended production of butter in the 100 and 500 gm packs as milk procurement cost are already higher,” he says. The rise in milk powder prices had impacted production of almost all related products including ice cream. The milk powder prices are expected to remain firm for some more time till sufficient supplies are ensured in local markets, Prasad adds.