In the economy of any state, the role of the food industry is huge. Currently, there are about 25 thousand enterprises of this industry in our country. The share of the food industry in the volume of Russian production is more than 10%. The dairy industry is one of its industries. It includes enterprises that produce their products from milk. The scale and uniqueness of production is determined by the number of inhabitants, their creative and genetic potential.
World Dairy and Meat Industry
All countries have food industry, however, in terms of their development, it differs significantly in different countries. The undisputed leaders are economically developed states. In addition, many industries, including the dairy and meat industries, are internationally specialized. This means that some states are large exporters, while others are large consumers.
The meat industry is a sector of international specialization in European countries (especially France, Italy, Germany, the Netherlands, Spain, Belgium and Denmark), North America, New Zealand, Australia, as well as some developing countries (Brazil, China, Uruguay, Argentina). The largest exporters of these products to the world market are Western European countries. They account for about 50% of total world exports. The leaders in the industry are the USA, Australia and Brazil. The largest importers of products are considered to be the states of Western Europe, Japan and Russia.
Dairy products are produced in Europe, as well as in the USA, Belarus, Russia, Ukraine, New Zealand and Australia. Finnish and French butter, cheeses from Germany, France, Switzerland, the Netherlands and Lithuania, sour cream from Estonia and Finland, yoghurts from Germany and France gained wide popularity. The leaders in the supply of dairy products to the international market are the states of Europe (especially Northern and Middle), as well as Australia and New Zealand. Its main importers are the CIS countries and China.
Features of dairy production
Milk is the most perfect type of food in its nutritional properties. It has an almost perfectly balanced nutrient composition. Dairy products account for a significant share in the diet of mankind. Researchers estimate that their annual consumption is about 16% of all types of food.
Dairy production has one important feature: the result is perishable products. In addition, they relate to goods characterized by a high rate of consumption. This means that their production should be large-scale, and the nomenclature should be steadily expanding.
A bit of history
The processing of milk in pre-revolutionary Russia took place mainly at home. During the Soviet era, the dairy industry became a large industry. Already in the 1930s, it received great development. It was then that as a result of the collectivization of agriculture and industrialization of the country, conditions were created for the active growth of manufactured products. At this time, the dairy industry was particularly actively developing in Moscow, Leningrad, Kislovodsk, Sochi, Kuibyshev, Sverdlovsk. Large dairy plants were established in these cities. In the 1970s, the USSR ranked first in the world in terms of production of animal butter and milk. Today, factories and plants produce a wide range of products. They are equipped with automated and mechanized lines for filling into bags, bottles and other types of containers, coolers and pasteurizers, evaporators, separators, cheese makers, etc.
Factors for the placement of dairy enterprises
These enterprises are placed depending on the availability of consumer and raw materials. They are concentrated mainly in highly urbanized areas.
The following most significant economic factors for the location of dairy enterprises can be distinguished:
- the location of the respective farms relative to the sales markets, as well as the presence of processing enterprises in this place; condition of communication lines and vehicles; the availability of containers for storing final products and raw materials;
- production potential, expressed in the already created livestock, industrial buildings and agricultural facilities;
- production efficiency from an economic point of view;
- stability and features of interregional relations in the field of dairy farming;
- provision with the means of production supplied by industry.
The trend of the modern market
The number of butter-cheese and dairy enterprises is relatively stable. However, there is currently a tendency in the market to create larger forms. Large firms often buy up small plants, thus expanding the sales territory and production capacity. In addition, the purchase of modern equipment, which allows to improve product quality and maintain the reputation of the manufacturer, is financed mainly by large enterprises. The industry’s profit in just one year, from 2009 to 2010, grew by 36.8%. This happened due to the successful functioning of national and regional market leaders.
Raw milk shortage
Dairy enterprises face a number of challenges. One of the main ones is the production of raw milk. The fact is that milk yield has been steadily declining in recent years. This means that the processing enterprises face the problem of a shortage of raw materials, which, in turn, leads to an increase in prices for it. In addition, raw milk produced by Russian producers is often of unsatisfactory quality. This creates additional difficulties in the production of high quality products. Enterprises are forced to use dry and artificial additives, which leads to an increase in production costs and a decrease in the value of goods.
Organizational Challenges
Currently, the dairy market of our country is experiencing serious difficulties. We can state the absence of a unified strategy for its development, internal disorder. There is no clear state support system for this industry.
The dairy industry in Russia is currently fragmented. Each processor and manufacturer is trying to cope with the solution of the problems of his company. As a result, the development of the dairy industry in our country is significantly slowing down. The unions that unite processors and milk producers, unfortunately, have been unable to devise a unified strategy for protecting the industry.
Requirements for production coming from government officials are multidirectional and politicized. Each association, each industry participant comes up with its own proposals and requirements, often contradicting each other. The state, in response to this, offers its own vision of resolving the problems that the dairy industry is facing - one that is convenient for officials. However, the market often cannot agree with him. The state now needs to draw up a clear business plan for 30-50 years ahead.
The dairy industry in Russia is highly disintegrated. Processors and producers of milk are often in opposition to each other. Common sense and world experience suggest that two industries - milk production and processing - are parts of the same system. The industry cannot be raised if only milk production is supported, since an increase in the volume of its production will require its processing. Similarly, the development of only the processing industry will lead to a shortage of raw materials. Only importers can quickly make up for it.
Other problems
To the main problems listed above that impede the development of an industry such as the dairy industry in our country, the following should be added:
- seasonality of milk production in our country;
- lack of milk collection points, lack of refrigeration units on farms;
- moral and physical depreciation of fixed assets of factories, the construction of most of which dates back to 70-80 years of the last century.
Many of the above problems must be addressed at the state level. They require the combined efforts of enterprises. This is the only way to solve many problems of the dairy industry.
Russia in the global dairy market
Our country is a major importer, but it can not be called a major player in the global market. Russia is not actually represented in the main world associations. This affects the development of the industry very negatively. The market of our country does not take part in the discussion of global problems. He does not know what the world development trends of such an industry as the dairy industry are. Instructions, innovative and scientific developments that use the world's largest associations, he also does not apply. Both milk processors and its producers, as well as end users, suffer from this.
Major manufacturers
Today there are quite a few manufacturers of goods in this industry in our country. Nevertheless, only some dairy enterprises sell their products in most regions of Russia. According to experts, the market leaders in our country are the following companies (2012 data):
- Unimilk.
- Wimm-Bill-Dann.
- Ochakov Dairy Plant.
- Voronezh Dairy Plant.
- Piskarevsky Dairy Plant.
- Permmoloko.
- Danone
- Rosagroexport.
- Ehrmann.
- Campina.
Market competition
The share of Wimm-Bill-Dann, a leader in the domestic dairy market, was estimated at 10.8% in 2012. Note that the share of its closest competitor is about 4 times lower. One could say that the food and dairy industry in our country is characterized by relatively high competition. But you need to keep in mind that many products have a short shelf life. In addition, they require special storage conditions. In this regard, the degree of competition in local and regional markets is much lower. As a result, it turns out that in some regions, local leading plants or industry leaders receive from 30 to 70% of the entire dairy market. The remaining share is shared by other local firms or firms in neighboring regions.
Import of goods
Imported goods compete with Russian products. In general, the share of imports is small, it is estimated to be in the range of 15 to 19%. This is because the dairy market has a natural defense against foreign competitors, as the goods are perishable and require special conditions of transportation and storage.
Nevertheless, in some categories with long expiration dates, it is imported products that are leading in the Russian market. In particular, foreign brands account for 30% of sold butter and 60% of cheeses. Import of dairy products and milk is also actively growing. The volume of imports of condensed cream and milk into the country in 2012 increased by 124.6%, cheese - by 34%, butter - by about 21%.
The volume of production of dairy products in Russia is not enough, so our country is forced to import large quantities of condensed milk, cheeses and butter. As for the market of whole-milk products, it is fully ensured by domestic production. Between 2009 and 2012, total imports of cheese amounted to $ 7.5 billion, butter - $ 2.15 billion. In the annual resources of cheese and butter, the share of products imported into the country from abroad is approximately 40%.