The secret of the farm: The authorities called on producers to reduce the cost of milk

The business asked the authorities not to introduce fixed prices for dairy products, as well as to provide even more assistance for the construction of farms and to protect them from unequal competition with Belarusian producers. This was asked by Deputy Prime Minister Dmitry Patrushev by representatives of large Russian companies at the XVII Congress of the National Union of Milk Producers as part of the Third Forum of Dairy Industry Leaders. The authorities, in turn, suggested that producers actively reduce the cost of milk in order to be competitive in export markets, as well as increase the volume of consumption of the drink by the population. See the Izvestia article about what awaits the market and what goals are set for the development of the industry.

Achieve food safety for milk

The year 2025 was a record year for Russia in terms of milk production: for the first time in almost 30 years, the figure reached 34.3 million tons. On January 21, Deputy Prime Minister Dmitry Patrushev began his address to the participants of the XVII Congress of the National Union of Milk Producers with such positive news. The event was held as part of the Third Forum of Dairy Industry Leaders. The session entitled "Open Dialogue with the Deputy Prime Minister" became the key event of the meeting, where strategic issues of industry development were discussed.

— Increasing the volume of raw materials makes it possible to ensure the full utilization of processing enterprises. The positive dynamics of production remained in the main categories of dairy products. In particular, the production of powdered and drinkable milk has increased, and the production of butter, cheese and cottage cheese has increased," the Deputy Prime Minister said.

He also noted that the Russian domestic market is provided with a wide range of dairy products, so the positive trend of growth in per capita milk consumption has continued. In addition, the volume of our own production allows us to strengthen trade relations with foreign partners. According to him, from 2019 to 2024, export revenue from the supply of Russian dairy products increased by 60%, last year it increased by another 13%, and in some items the increase reached almost 30%.

At the same time, according to him, the dairy industry is still on its way to achieving the indicators of the Food Security Doctrine. According to the national development goals, by 2030 Russia should produce at least 38.5 million tons of raw milk annually.

The second important topic that the Deputy Prime Minister drew attention to was the investment attractiveness of the dairy industry. According to him, the government provides large-scale financial support to ensure it. According to the preliminary results of 2025, its volume amounted to 77 billion rubles, which is twice as much as in 2020, when it was 38 billion rubles. In addition, a whole set of tools is provided, which adapts and develops depending on the current situation in the industry.

— However, our common task is to work on reducing the cost of milk production. Otherwise, the industry will not be able to become competitive in the current conditions," the Deputy Prime Minister stressed.

According to him, this goal can be achieved by increasing the robotization of processes in animal husbandry, which a number of companies are already successfully using, increasing their efficiency. In addition, businesses actively need to work to reduce resource losses and improve the quality of their feed supply. Also, according to him, it is important to strengthen the genetic potential of cattle.

— In just a few years, we will have to increase the volume of raw milk by more than 4 million tons. It will not be possible to do this by simply formally increasing the number of livestock. First of all, we are talking about improving the efficiency of our animals," the Deputy Prime Minister stressed.

Representatives of the dairy industry reacted to Dmitry Patrushev's speech with applause. And the head of Soyuzmolok, Artyom Belov, noted that business has been experiencing difficult times almost every year lately. Nevertheless, according to him, milk production and consumption in Russia are growing, while imports are declining. This is largely due to government support, he added.

At the same time, 2025 was a turbulent year for the industry due to an increase in the key rate, which, according to him, influenced the increase in production costs. In addition, the business faced a decrease in demand for its products, which began to level off only by the end of last year.

Producers asked Dmitry Patrushev about new benefits from the state, as well as whether the authorities would fix prices for dairy products and protect them from unequal competition with their Belarusian counterparts. The Deputy Prime Minister said that the dairy industry has already become one of the most subsidized by the state, state regulation of prices is possible, but it is extremely short-term, and the government generally avoids such interference in the market economy. As for protection from Belarusian manufacturers, a single market for goods and services has been formed within the framework of the Union State. At the same time, he supported the creation of a working group with the participation of Russian business, so that it would be represented in the work on developing supply volumes within the framework of the Union State.

Oksana Lut, Head of the Ministry of Agriculture, continued the topic of achieving the goals of the food security doctrine at the congress. According to her, it is not easy to fulfill them, but it is realistic, but if the export of Russian products does not develop, manufacturers will have surpluses. At the same time, she noted that the difficulty of developing exports lies in the high cost of milk. In Russia, the price of raw milk is 41.7 rubles per 1 kg, while in neighboring Belarus it is 33.8 rubles per 1 kg.

According to the Ministry of Agriculture, milk is also cheaper -raw materials cost 35.5 rubles/kg in China, 37.3 rubles/kg in Brazil, 36.6 rubles/kg in New Zealand and 39.6 rubles/kg in the USA. According to Oksana Lut, in order to enter the export market by 2030, Russia needs the price of milk to be no higher than 37 rubles per 1 kg. In order for our country to be successful in the milk market, there must be a reduction in production costs, the head of the Ministry of Agriculture stressed, noting the unwillingness of businesses to make quick decisions, including improving the efficiency of dairy production.

How and why did the cost of milk increase

The cost of finished dairy products in 2025 in Russia turned out to be on average 19.7% higher than a year earlier, an interlocutor at the National Union of Milk Producers (Soyuzmoloko) told Izvestia. At the same time, he noted that in some categories, primarily dairy—intensive ones, the rates were higher, while in others they were lower.

The increase in production costs was also confirmed by the top manager of the agricultural holding. Now it is about 40 rubles per liter, added a second Izvestia source in a large agricultural enterprise. The largest share is occupied by feed costs, which doubled in annual terms, the top manager noted. Total operating costs (energy, vaccines, medical equipment, maintenance and purchase of equipment, loan servicing, etc.) have also increased almost 1.5 times, he said. The increase in loan servicing costs due to a decrease in subsidies also had an impact, the Soyuzmolok representative added. At the same time, by the end of 2025, prices for raw milk "sank somewhat," the top manager of a large agricultural holding drew attention.

Throughout the year, raw milk was priced 25-30% higher than the previous year, and in the fall, an uncharacteristic decrease in purchase prices for it began for this period of the year, according to a review by the Institute for Agricultural Market Studies (ICAR). This is due to the large stocks of finished dairy products, as well as the high base of 2024, when prices for raw milk increased by 32% year-on-year in December, they believe.

According to Rosstat, the cost of milk and dairy products in 2025 increased by 14.7% compared to 2024.

The increase in retail prices occurred in conditions of stable selling prices from producers, said a source of Izvestia in a large agricultural holding. In May – November 2025, the selling price of drinking milk ranged from 69 to 70 rubles (excluding VAT), according to the available editorial data of market participants. At the same time, its retail value increased from 119 rubles in May to 122 rubles (excluding VAT) in November, according to industry data. The adjustment of prices for dairy products is a consequence of an increase in the cost of milk production and processing, explained the representative of Soyuzmolok.

Georgy Ostapkovich, Research Director of the HSE Center for Market Research, believes that meeting the government's requirements to reduce production costs and ultimately the final price of milk will depend on many factors. First of all, this will be influenced by the possibility of reducing costs, including logistics, housing and communal services, wages, etc. At the same time, the government's call for increased production efficiency is absolutely correct, taking into account the development of new technologies and the replacement of manual labor with automated production, he noted. If the business is interested in fulfilling these components, then reducing the cost of milk is quite possible, the expert concluded.