Milk purchase prices in Belarus will increase by an average of 10%

August 11, Minsk / Tatyana Chumakova - BELTA /. Procurement prices for milk in Belarus will increase by an average of 10%. This decision is contained in Resolution of the Council of Ministers No. 1177 of August 9, 2010, the Council of Ministers' Office informed BELTA. Based on the document, relevant amendments have been made to the government's Resolution No. 812 "On Procurement Prices for Livestock Products Supplied for Republican State Needs" of June 5, 2008. The procurement price for "Extra" grade milk will increase from Br1000 to Br1100 per 1 kg, for top-grade milk - from Br865 to Br950, and for first-grade milk - from Br795 to Br875. As the Ministry of Agriculture and Food informed a BELTA correspondent, the adoption of the resolution will increase milk production profitability to 15%, and allow agricultural organizations to receive about Br200 billion in additional revenue in August-December 2010, which will be used to purchase mineral fertilizers, fuel and lubricants, as well as to increase wages. "Compensation for the increased cost of raw materials for milk processing organizations will be carried out by a phased increase in selling prices within the forecast inflation parameters, which, along with export revenue, will ensure profitable operation of the dairy industry at the level of 2-3%," the Ministry of Agriculture and Food emphasized. In June of this year, prices for dairy products supplied for export remained stable, and since mid-July, they began to rise. In the last week of July alone, export prices for the main dairy products increased by an average of $200 per ton. As a result, world market prices, despite the 10% increase in milk procurement prices in March and June 2010, allow processing organizations to generate significant profits for a number of products. Thus, the profitability of cheese and whole milk powder exceeded 20%, casein - 35%, and skimmed milk powder is about 70%. Selling prices for socially significant dairy products sold in the republic, with their increases in April and May 2010 by 2% and in July by 3%, mainly ensure their break-even production. At the same time, with the increase in prices for material resources used for agricultural production, agricultural organizations are experiencing an acute shortage of funds for the purchase of mineral fertilizers, fuel and lubricants, and wage increases. According to operational data, in January-June 2010, the milk processing industry generated Br383.8 billion in profit from sales and Br246 billion in net profit. The profitability of dairy products sold was 11.3%. "Given the stable financial situation of milk processing organizations and the absence of seasonal declines in world market prices for dairy products, the draft resolution of the Council of Ministers of the Republic of Belarus on increasing milk procurement prices by 10% was submitted for approval," the Ministry of Agriculture and Food explained. The resolution will enter into force after its official publication.-0-