Why butter prices soar
Milk processors have agreed with retail chains to increase the product cost and other high-fat diary products by 10-30%
From September, the largest retail chains have revised the purchase prices for dairy products with a high content of milk fat (butter, cream, sour cream, yoghurts, cheeses), as a result of which retail prices have increased from 10% to 30%. Butter with a fat content of 72.5% rose the most — a briquette weighing 180 grams approached 200 rubles. Tatarstan producers deny the occurrence of a shortage of the product, calling the main reason for the increase in purchase prices for raw milk by 12-15%. This year, the ministry of agriculture of the Republic of Tatarstan for the first time provided subsidies to processors in the amount of 200 million rubles, but there is no tangible effect yet. A new spike in oil prices could happen by the end of the year, refiners warn.
A kilogramme of butter for 1,000 rubles
The increase in butter prices has continued since May of this year, but has so far remained unnoticeable to consumers due to a small “indexation” of the cost of products. For example, in Kazan, the retail price of butter with a fat content of 72.5% remained stable for a long time and kept in the range of 120-130 rubles per pack weighing 180 grams.
Prices jumped sharply in October: one of the most popular food products immediately rose in price by almost 30%. In large retail chains of the city, a small briquette of butter approaches 200 rubles, although in some stores it is 160-170. In any case, customers have to add a fifty kopeck piece above to the previous price per pack.
Buyers noticed that against the background of rising prices, the range of butter has decreased. If earlier it was possible to choose from 8-12 brands in hypermarkets, including Belarusian manufacturers, now there are five to six brands on the shelves and local manufacturers dominate among them.
Tatarstan milk processors, in a conversation with Realnoe Vremya, stated that the production of butter is not decreasing. About 4-5 thousand tons of milk are processed daily in the republic, of which a significant part goes to the production of butter. But its volumes vary depending on demand and price conditions. According to the ministry of agriculture of the Republic of Tatarstan, 102,500 tonnes of butter were produced from January to August.
How to break a “check” with an increase of 30%
Indeed, from September, for the first time since the beginning of the year, the largest retail chains significantly revised the purchase prices for dairy products with a high content of milk fat (butter, cream, sour cream, yogurt, cheese). As a result, retail prices increased from 10% to 30%, processors said.
At the same time, according to him, each manufacturer “has its own price”. However, not all processors managed to successfully negotiate prices with the chains, he said. Therefore, there are those who have suspended the supply on the network, since “it is unprofitable to ship oil at the old price”.
Why butter was hit
As the producers told Realnoe Vremya, from August to September, the enterprises increased the purchase prices for milk from 26 to 40 rubles per liter, depending on the fat content. It was these costs that formed the basis for the revision of butter prices.
The increase in production costs was influenced by other factors, such as the indexation of employee salaries, an increase in the key rate to 19%, “and, of course, an increase in demand for the products themselves”, the ministry stressed.
Do they need subsidies?
To support processors, the ministry of agriculture and food of the Republic of Tatarstan provided subsidies for processing of 180 million rubles for the first time this year. “Since 2024, a new subsidy has been introduced to support the processing of raw cattle, goat and sheep milk for food products. The amount of this subsidy amounted to 179979833.33 rubles. Due to these support measures, the dairy production market remains stable today and it is possible to restrain explosive growth," the ministry's press service reported.
The dairy industry of the republic has become a leader in terms of the amount of state support received. “A positive factor is that all measures to support enterprises engaged in the production and processing of milk have been preserved, thanks to the government of Russia and the government of Tatarstan.
However, processors are confident that this is a “drop in the bucket” and will not save enterprises from further price increases. “Tatarstan processes, roughly speaking, about 4,000 tonnes of milk every day. If you raise the purchase price by 1 ruble, then the costs increase to 4 million rubles per day. If the purchase price increases by 15 rubles, expenses increase to 60 million rubles per day. And if you take it per month, then expenses grow by 280 million rubles per month," one of the interlocutors of Realnoe Vremya estimated.
Denis Pirogov, the director general of the Union of Milk Producers of Tatarstan, added that the increase in retail prices occurred not only in Tatarstan, but also throughout the country.
“Belarus supplies Russia with a serious volume of milk, but still not enough. Their share in the Russian market is no more than 15%," Pirogov added.
Currently, the cost of a kilogram of oil with a fat content of 82.5% on the stock exchange has increased to 1,000 rubles, and oil with a fat content of 72.5% varies about 900 rubles. “These costs will continue to be transferred to the shelf, and this applies not only to butter, but also to all dairy products," he believes.
Since May, the Rosselkhoznadzor mechanism for monitoring incoming and outgoing raw materials according to the parameters of milk fat has been in operation. As a result, all adulterated vegetable fats left the market. If earlier there were products from at least 10 different manufacturers on the shelves, today they are supplied by units.
The October increase in the butter price is not the last this year, refiners predict. According to them, a new leap may happen by the end of the year, when demand will grow even more, and the capacity of enterprises will not have time to grow.