Dairies' margins under pressure on 20% hike in milk procurement cost

At the farm gate, cost has risen by at least a fifth this year

 Faced with a sharp increase in milk procurement costs, private dairies and co-operatives are facing margin pressures this season.
 

After dips over recent years, milk prices have risen sharply. At the farm gate, the procurement cost has risen by at least a fifth this year, to Rs 27-28 a litre for Gujarat Co-operative Milk Marketing Federation, producer of the Amul brand of products, from Rs 21-22 a litre last year.

“Milk procurement cost has gone up because of drought in some parts of Maharashtra,” says Amitabha Ray, chairman, Schreiber Dynamix Dairies.

Part of the rise in procurement