Ukraine has 18 million fewer cows grazing on its rich agricultural land than it did in Soviet days.
A shortage of cows, lack of organized livestock breeding and bureaucratic barriers have caused dairy prices to surge, the head of a leading Ukrainian dairy company told the Kyiv Post in an interview.
U.K.-native Fredrick Aherne, CEO of Milkiland, a leading Ukrainian dairy producer, said the market is suffering from a shortage of quality cows and milk. According to Aherne, Ukraine’s stock of cows has decreased tenfold in the past two decades.
Typically, dairy product prices fall in the summer, Aherne said. But for the first time in years, they are skyrocketing this summer, he added. Prices on dairy products have sharply risen this year on top of a 20 percent increase last year, according to Kyiv-based investment bank Dragon Capital.
“There is simply not enough milk in the country. There are two million cows in the country now, versus 20 million in 1991-1992. This is a key problem for the state,” Aherne said.
To remedy the situation, Aherne is calling for government to lift choking restrictions on business in the country. He said his company is also seeking to encourage cow-owning villagers spread across the country to boost efficiency by bringing their cows under consolidated management within cooperatives.
“Milk in Ukraine is more expensive than milk in the EU, believe it or not. The cost of milk in the EU should be the highest as they have the highest labor and feed costs, but the cost of milk to process is the highest here,” Aherne said.
“The reason why we are pushing for the cooperatives is to improve the quality of milk that we receive. Here, we do not get the cheese yield that we would if it was top-quality milk in terms of protein and fat content. We are fighting every day to get the best cheese yield that we can, but we take what we get. Here, we pay on the average Hr 3 [$0.38] per liter. My colleagues in the U.K. are currently paying around 19 pence [$0.30],” Aherne added.
In the interview published in English on kyivpost.com and in Ukrainian language on kyivpost.ua, Aherne also called on the government to crack down on misleading labeling. In the widespread practice, domestic producers fail to reveal to consumers that their dairy products contain less milk and more substitutes such as palm oil and soy.
“I don’t want to say that I am against the way the state manages the food industry, but the reality is that all the members of European Business Association dairy committee are pushing for labeling legislation that is strictly controlled, where you have to clearly say if this is a milk product, if the raw material comes from a cow and there is nothing else. Everybody knows that many companies ignore it,” he said.
Kyiv Post staff writer Vlad Lavrov can be reached at [email protected]
