Milma records post-COVID highs driven by farmer incentives, but the prospect of a major milk price hike looms post-election; analysts watch agribusiness data.
The dairy sector in Kerala, under the cooperative umbrella of Milma, has delivered a striking performance, achieving a record milk procurement increase of 14 percent overall. This significant surge marks a sustained rebound following a sharp decline during the COVID-19 pandemic, with continuous growth reported over the last six months. This recovery signals renewed confidence and stability within the regional dairy supply chain, demonstrating the sector’s resilience despite broader economic pressures.
Regional unions were key drivers of this exponential agribusiness data growth. The Ernakulam Union led the charge with a remarkable 20 percent increase, closely followed by the Thiruvananthapuram Union, which recorded an 18 percent rise. Even the Malabar Union, while maintaining a strong pace, contributed an 11.5 percent increase. This concerted effort across the state has been heavily incentivized, as Milma reports channeling Rs. 255 crore back to dairy farmers through additional milk price payments and subsidies, effectively drawing more producers into the cooperative model.
Interestingly, this production boom is attributed to a combination of favorable climate change impacts and a growth in the number of operational farms. However, this positive trend stands in sharp contradiction to official state figures. Data from the Dairy Development Department indicates a substantial 32 percent decrease in the number of cattle in Kerala, creating a complex production paradox that warrants closer examination by dairy economics analysts and manufacturers dependent on consistent raw material flow.
Looking forward, the focus shifts from procurement volumes to milk pricing stability. Milma Chairman KS Mani has signaled an impending retail price adjustment, suggesting that the milk price hike could be finalized immediately following the local body elections. The Chairman confirmed that an expert committee has officially recommended the increase, aligning with strong demands voiced by dairy farmers seeking better returns for their output.
The Chairman explicitly stated that a board meeting, followed by necessary consultation with the government, must take place before a definitive decision is made. Market analysts anticipate a potential increase of between Rs 3 and Rs 4 per liter, a significant adjustment that will directly impact consumer budgets and the overall profitability across the entire dairy supply chain. This potential policy change underscores the delicate balance between producer profitability and consumer affordability in the cooperative model.
Source: Review the full dairy analysis and local insights at Kerala Kaumudi: https://keralakaumudi.com/en/news/news.php?id=1653402&u=milma-achieves-record-in-milk-procurement-price-hike-after-local-body-elections
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