Coronavirus outbreak: Fall in demand and shortage in cattle feed hit the dairy industry
Photo Credit: AFP

Mumbai: Due to lockdown, there has been a decline of 20-30 per cent in demand which is already impacting the dairy industry. But according to Mumbai-based milk producers, the biggest problem they face today is a shortage in supply of cattle feed. The producers fear all these factors will add up to an increase in input costs, resulting in a hike in milk prices.

Most milk producers in the region have fodder supplies of less than 15 days. A milk producer said, “Even if the lockdown is withdrawn or even the factories start operating tomorrow, the black market for cattle feed will make sure the feed is sold at skyrocketing prices. That will leave us with no option but to increase prices.”

Aarey milk colony-based IJ Singh, said, “At present, we just want to feed our cattle even if that means losses for us. But the trouble is there is no cattle feed available. Most of the industries that provided cattle feed are shut — either the factories have shut down due to lockdown or there are manpower constraints.”

Mahanand, a venture of MRSDMM (Maharashtra Rajya Sahakari Dudh Mahasangh Maryadit), has also faced a shortage in supply of cattle feeds. An official with MRSDMM, said, “We will be raising this issue at the April 5 meeting. We are seeking a hike of Rs 2. It is difficult to operate in such a scenario. While the cost of cattle feed is increasing, the additional cost of purchasing protective gears is making it worse.”

Like many Mumbai-based milk producers, Singh sourced feeds mainly from factories that processed flours of different grains. Most feeds are by-products of food grains, yet the feed prices keep fluctuating, added Singh.

Many milk producers feel that it is essential that the government intervenes and regulates the cattle feed sector. Yet another dairy farm owner who supplies milk to Aarey Dairy, Rahil Salim Nandolia said, “There will be a rise in prices, post the lockdown. But at present, no such discussions have taken place.”

Looking at the market situation, RS Sodhi, MD of Gujarat Cooperative Milk Marketing Federation (GCMMF), said, “This issue that milk producers (in Mumbai) must be facing will be temporary. With the cost of cattle feeds coming down, in addition to a decline in demand and rise in the supply of milk, it is unlikely that the industry will look at hiking prices.” Amul has been supplying around 20 lakh litres of milk every day to Maharashtra.

Other dairy cooperatives based in Maharashtra, have not faced any trouble in terms of feed. An executive of Kolhapur-based Gokul Milk, said, " The shortage in cattle feed is limited only to Mumbai region. In other regions of Maharashtra, we don't see any issue."

Meanwhile, Noida-headquartered Mother Dairy which normally supplies around 1.80 lakh litres of milk per day to Mumbai is also experiencing a dip of 25-30 per cent. "This is mainly due to closure of institutional sales and movement of migrant labourers from the region,” said the spokesperson of Mother Dairy Fruit & Vegetable Pvt Ltd. The company pointed out that before this dip in demand, there was a surge of panic buying among consumers which is not the case now.

MilkLane, which is largely sold through e-commerce channels, has also seen demand reduction. Gaurav Haran, CEO, MilkLane, said, “We have seen a significant demand reduction for some of our clients as they were unable to further sell to their consumers. We expect that to be largely restored in the next few weeks.”

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