Dairy production in Russian shows moderate growth

In Russia, cream production jumped by 23% to 146,500 tonnes, cottage cheese production by 9% to 334,500 tonnes, and yoghurt by 13% to 330,600 tonnes. Photo: Canva

In the first half of 2024, Russia saw a 3% rise in raw milk production to 13.2 million tonnes, a study by Soyuzmoloko, a prominent Russian dairy industry association, showed.

While the Russian dairy industry experienced a mixed production dynamic in previous years, in 2024, virtually all segments are growing. For example, cream production jumped by 23% to 146,500 tonnes, cottage cheese production climbed by 9% to 334,500 tonnes, and yoghurt by 13% to 330,600 tonnes. The ice cream segment also demonstrated growth of 14% to 260,300 tonnes, the organisation estimated.

Moderate growth was also recorded in the sour cream segment, where the output inched up by 2% to 242,900 tonnes. The picture was similar in the kefir segment, where it rose by 1% to 400,400 tonnes, and in cheese products, where the figure grew by 1% to 85,000 tonnes.

In 2023, the Russian dairy industry received support from raw milk prices, which largely remained flat, said Artem Belov, general director of Soyuzmoloko. Dairy production was even among the few food products that drove food inflation down.

Dairy prices are in stark contrast to some other food products. For example, egg prices shot up by a staggering 61.4% in the country last year, according to official data.

In 2024, raw milk production has already seen an increase of nearly 4%, and as of the middle of the year, the prices for most dairy products also followed an upward trajectory.

New market leader

Not only the Russian dairy industry’s output on the rise. The financial performance of the industry leaders also looks quite healthy. As estimated by Soyuzmoloko, last year, the 30 largest Russian dairy manufacturers together earned Rub 857 billion (US$9.44 billion) in net profit, which is 10.1% higher than in 2022.

The analysts reported that Wimm-Bill-Dann became the largest player in the Russian dairy market, with revenue close to RUB 136.7 billion (US$1.51 billion). The company overtook Health & Nutrition, former Danone, whose business experienced deconsolidation in some segments as Danone departed from Russia in 2023. This departure had a significant impact on the market dynamics, leading to a reshuffling in some market segments.

The dairy industry is performing well compared to other agricultural segments. The Russian Agricultural Ministry recently warned that the average profitability rate across all industry sectors has neared the level jeopardising further investments.