Higher feed, fuel and logistics expenses, along with increased industrial demand, add pressure to milk prices and dairy supply chains.
Several major Indian dairy brands and cooperatives have increased retail milk prices over the past year, with some reported revisions reaching as much as 17%. Rising animal-feed costs, transportation expenses and stronger industrial demand are adding pressure to the dairy supply chain, affecting household budgets as well as manufacturers of curd, butter, ghee, paneer and ice cream.
Major dairy brands revise milk prices
Several leading dairy companies and cooperatives have adjusted prices to manage higher procurement and operating costs.
- Amul: The Gujarat Cooperative Milk Marketing Federation (GCMMF) increased prices of selected milk varieties by ₹3–₹5 per litre, citing higher animal-feed, packaging and fuel costs.
- Sanchi: The Madhya Pradesh cooperative brand increased prices by up to ₹4 per litre amid rising raw-milk procurement costs.
- Nandini: Karnataka’s state cabinet approved an increase of approximately ₹8 per litre, intended to support payments to dairy farmers.
Cooperatives and private processors have been revising retail prices to balance procurement payments, processing expenses and distribution costs.
Rising feed and fuel costs increase production expenses
Higher animal-feed prices are adding to the cost of milk production. Figures cited in the report indicate that maize prices increased by approximately 8% annually, while the price of maize-based cattle feed rose by around 75%. Oil cakes, another important component of livestock feed, have also become more expensive.
These increases raise the cost of maintaining dairy animals and producing milk, putting pressure on farmers’ operating margins.
Fuel expenses have added another layer of cost. Diesel price fluctuations affect milk collection from villages, transportation to processing plants and distribution to retail outlets. Dairy processors must also manage higher expenditure on refrigeration, packaging and processing.
Industrial demand adds pressure to regional milk supplies
Traders in Bhopal and Anand have reported that ice-cream manufacturers are purchasing larger volumes of milk earlier than usual ahead of the summer season.
Some processors are converting these purchases into milk powder and frozen milk fat for storage and subsequent use. Gaurav Yadav of Gaurav Dairy and Dewand Bhatt of Santram Dairy & Foods have also reported increased demand in recent months for milk, curd, butter and ghee.
Advance procurement by industrial buyers can place additional pressure on liquid-milk availability in regional markets, particularly where collection volumes and distribution requirements are temporarily mismatched.
Winter procurement remains important for dairy processors
November to February is generally a significant procurement period for India’s dairy industry. Milk availability typically improves during winter, allowing cooperatives and private processors to increase collections and convert surplus milk fat into products such as butter and ghee.
Stocks accumulated during this period help meet demand throughout the year, including summer, when consumption of ice cream and other dairy products generally increases.
Earlier or higher industrial purchases can influence the availability of liquid milk for other uses, especially in markets where collection and distribution networks have limited flexibility.
India retains its position as the world’s largest milk producer
India’s milk production reached approximately 247.87 million tonnes in FY2024–25, compared with 239.30 million tonnes in FY2023–24, representing growth of around 3.5%.
The country accounts for approximately 25% of global milk production and remains the world’s largest milk producer. Domestic consumption absorbs most of the country’s milk output.
The report estimates annual dairy-product exports at approximately 67,500 metric tonnes, valued at around ₹22.7 billion.
Higher costs could affect school nutrition programmes
Milk and milk powder are supplied through school nutrition programmes in states including Karnataka, Madhya Pradesh and Gujarat. Higher procurement, collection and distribution expenses could increase the financial pressure on these programmes.
Milk remains an important component of children’s diets, while dairy ingredients also support food processing and the manufacture of traditional sweets and other products.
Separately, enforcement action against illegal analogue paneer, reportedly manufactured using ingredients such as vegetable oil and starch, has been associated with supply gaps in some wholesale markets. The report suggests that these gaps may have increased procurement costs for certain dairy businesses.
Cost pressures extend across the dairy value chain
The reported price revisions reflect a combination of higher farm-level production expenses, increased processing and logistics costs, and changing industrial purchasing patterns.
For dairy cooperatives and private processors, the challenge is to maintain remunerative milk procurement while managing retail affordability and ensuring adequate supplies for both household consumers and industrial customers.
The extent to which these pressures continue will depend on feed-price movements, milk availability, seasonal demand and the ability of dairy businesses to manage procurement and distribution efficiently.
Join Our “Dairy & Food Jobs Updates” WhatsApp group
Follow the Agri Jobs Updates channel on WhatsApp:
Disclaimer
I do my best to share reliable and well-researched insights but occasional errors or omissions may slip through. Please view all content as informational.
Stay informed on all the latest news updates
All Agriculture Books Free Download
All Dairy Technology Books Free Download
All Agricultural Engineering Books Free download
All Horticulture Books Free Download
All Fisheries Science Books Free Download
For Daily Update follow us at:
Facebook Telegram Whatsapp Instagram YouTube
The contents are provided free for noncommercial purpose such as teaching, training, research, extension and self learning.
If you are facing any Problem than fill form Contact Us
If you want share any article related Agriculture with us than send at info@agrimoon.com with your contact detail.
