Narrowed ryazhenka: demand for dairy products has plummeted in Russia
The demand for dairy products among Russians has dropped sharply, Izvestia has learned. In the first seven months of the year, sales of sterilized milk decreased by 10.8%, butter and margarine — by 10.7%, and fermented baked milk — by 6.6%. At the same time, butter rose in price by 34%, sour cream and milk — by 22%. Manufacturers and processors are increasing the selling prices of their products against the background of increased costs. Izvestia found out what other reasons the cost of milk production is increasing and what the consumer should expect.
Why has the demand for dairy products decreased?
Retail sales of sterilized milk in Russia in physical terms in January–July 2025 decreased by 10.8% compared to the same period in 2024. This is stated in a review by the Nielsen research company, which took into account products in more than 180 retail chains, the company does not disclose absolute data. Izvestia has reviewed the document. This is the biggest drop in sales in the dairy category. Sales of pasteurized milk decreased by 0.7%, cream — by 2.5%, according to the data.
A decrease in sales is observed in the entire dairy category: demand for butter and margarine decreased by 10.7% during the reporting period, ryazhenka — by 6.6%, processed cheese — by 6.1%, yogurt and kefir — by 5.8% and 4.3%, respectively, sour cream — by 3.4%, the review says.
Sales are declining amid sharply increased prices for these products, say two top managers in large retail chains. An active reduction in demand began in March 2025, confirms Dmitry Mironchikov, managing partner of the Agromil consulting company. According to him, this is a direct consequence of the rise in the price of raw milk by "more than 25%" in 2024.
The demand for dairy products is highly dependent on price changes, he stressed. Dmitry Vostrikov, Executive Director of the Rusprodsoyuz Association, agrees with this. For example, to produce 1 kg of butter, 23 kg of raw milk is required, the average wholesale cost of which in July was 41,906 rubles per ton (+23.1% YoY), he added.
According to Rosstat, in January–July, the average retail price of butter increased by 34% and amounted to 1,218 rubles per 1 kg, sour cream — by 22% (up to 355 rubles per 1 kg), pasteurized milk 2.5–3.2% fat content increased by 22% (up to 95 rubles per 1 liter), cream — by 21% (up to 373 rubles per 1 liter), semi—hard, hard and soft cheeses - by 19% (up to 947 rubles per 1 kg).
Several small manufacturers have already notified retail chains of a 10-15% increase in prices for their products from September 15, said a top manager of a large retail chain. Izvestia's interlocutor declined to name these companies.
At the same time, the Nielsen representative attributes the decline in sales of "traditional" dairy products (kefir, sour cream, fermented milk, yogurt, milk, etc.) to the overflow of demand for "modern milk" — yoghurts, cottage cheese and glazed cheeses. Thus, natural sales of granulated cottage cheese in January–July increased by 13.1% year—on-year, thick yoghurts and dairy desserts - by 6.5% and 6.9%, respectively.
What makes milk more expensive?
The cost of milk production in January–July increased by 6-7% compared to the same period last year, confirms Stanislav Frolov, First Deputy General Director of Rusmoloko Management Company. An increase in costs was also observed for fuels and lubricants, seeds and fertilizers, adds Andrey Grigorashchenko, Vice President for Regional Development and GR of the Damate Group of Companies.
A significant share in the structure of milk production is occupied by the cost of feed for cattle, which has almost doubled in price due to bad weather, said Andrey Neduzhko, CEO of the Steppe agricultural holding. Energy costs, equipment maintenance and other operating costs also increased by 40%, including the cost of medicines and veterinary drugs increased by 13%, wages increased by 7-10%, he explained.
In January–July, the output of whole—milk products amounted to 7.09 million tons, which is 0.3% less than in the same period a year earlier, according to data from Soyuzmolok (which unites the largest producers and processors of these products). The production of drinking cream decreased by 8.5%, to 189.8 thousand tons, cheeses and cheese products — by 2.2%, to 602.1 thousand tons. At the same time, the production of butter increased by 3.4%, to 201.9 thousand tons, but its consumption decreased by 8.8%, to 203.7 thousand tons, follows from the data of the union.
According to the results of last year, the average profitability of the dairy farming industry, excluding subsidies, was more than 28%, which is higher than the industry average, a representative of the Ministry of Agriculture told Izvestia.
In the first half of the year, the production of raw milk in farms of all categories amounted to 16.9 million tons, according to the agency. The average yield per cow in agricultural enterprises increased by 4.5% year-on-year.
The growth of the raw material base makes it possible to increase the production of processed products, the representative of the ministry notes. Thus, in January–July, the volume of drinking milk production amounted to 3.5 million tons (+0.9% YoY), yogurt — 471 thousand tons (+0.5%), cottage cheese — more than 285 thousand tons (+1.6%), powdered milk and cream — over 135 thousand tons (+13%), he added.
What does state subsidies have to do with it
Depriving large agricultural holdings of state subsidies may worsen the situation of dairy farmers. We are talking about subsidies that were used to stimulate production. As Izvestia wrote, the Ministry of Agriculture plans to redistribute this money to other types of support for farmers, including the development of new investment projects and the support of breeding and genetic centers. Starting in 2026, only manufacturers included in the unified register of small and medium-sized enterprises (SMEs), the self-employed, who run their own subsidiary farms, as well as scientific and educational organizations will be able to receive state subsidies.
Soyuzmoloko opposed the abolition of state subsidies, the association sent a corresponding letter to the Ministry of Agriculture, four top managers in large dairy companies said. The union declined to comment on this information, and its head, Artyom Belov, did not respond to a request from Izvestia.
The "per liter" subsidy is one of the key forms of state support for large producers, Andrei Neduzhko points out. Its cancellation may affect the cost of production, he stressed.
— Compensatory measures have not yet been provided for manufacturers. Government support will be deprived of major players, whose market share is almost 20% of the total volume of raw milk produced. As a result, the drop in profitability may be around 15-20%," the top manager explained.
The cancellation of the subsidy may affect the cost of milk purchases if suppliers compensate for it at the expense of processors, says a representative of Health & Nutrition (H&N, formerly Danone Russia). On average, the subsidy for a liter of marketable milk in the country was about 0.83 rubles, he estimates. The additional load may amount to about 1 ruble for each kilogram of finished dairy products, according to a representative of the processor.
Refusal of subsidies to support milk production may lead to a decrease in working capital held by producers, adds Andrey Grigorashchenko. Production costs will also increase, which will force manufacturers to borrow more. This will force dairy farmers to include interest on the loan in the cost of production, the top manager notes.
EcoNiva understands the reduction of subsidies for large agricultural holdings in the context of a federal budget deficit, its representative told Izvestia.
The refusal of this subsidy is sensitive for market participants, said the Chairman of the Presidium of the Association of Retail Trade Companies (ACORT) Stanislav Bogdanov. Large manufacturers act as a price guide for other companies. According to him, the cancellation of state support will force them to raise prices, as a result of which other suppliers will begin to adjust to this level.
But the big concern among large milk producers is the increase in capex and the cost of financing when resuming an investment program in the raw materials sector, says Stanislav Frolov from Rusmoloko. According to him, with the marginal cost of the subsidized stall amounting to 627,000 rubles, the actual cost of construction costs increased by "more than 50%."
At the end of 2024, the Ministry of Agriculture published changes to the rules for subsidizing preferential loans. The main ones concerned subsidizing previously concluded and currently operating preferential investment loan agreements issued for the construction of dairy cattle breeding complexes: the amount of subsidies to banks for these loans has been reduced from 80-100% to 50% of the Central Bank's key rate for 2025.
As a result, the financial expenses of companies for servicing such loans have doubled this year, said the representative of EkoNiva. Starting in 2026, it is important to return support for subsidizing loans issued for the construction of dairy farms to the level before the changes from January 1, 2025, he believes.
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