The Russian population’s dairy consumption is set to rise to 36 million tonnes by 2025, or 245.5 liters per capita, 2% up compared to 2020, the state-owned agricultural bank Rosselhozbank forecasted. The growth is expected to be driven by the increasing demand for butter and cheese. This trend will pave the way for the Russian dairy business to expand production capacities. By 2023, Russia is set to launch new milk farms with a total designed production performance of 1.2 million tonnes of milk per year. The industry is likely to add 5 million tonnes of milk production per year in the long run, Rosselhozbank estimated.
In 2020, the average price for dairy products on the Russian market increased by 3.9%, below the average food inflation ratio of 4.9%. According to Dalnov, this factor spurs the demand for dairy products among the Russian population, as they are becoming more affordable. “A significant share of projects in this field are associated with large producers’ investments in milk processing capacities and establishing on their base full-cycle production complexes. This trend is most common for Central Russia and Western Siberia, where, according to our forecasts, the processing segment has a potential to expand capacities by 600,000 tonnes per year by the end of 2021,” Dalnov said.