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Milk Production Trends in India

Can you guesswhich one is the largest food crop in India? Well, it’s milk! This may sound surprising, but milk production in India is worth a staggering Rs 6.5 lakh crore. This is much more than the combined value of paddy and wheat production in the country. India leads in milk production globally as well, contributing around 20 percent of the world’s total milk production. As a matter of fact, India is the largest milk producer in the world.

India produces more than 165 million metric tons of milk every year and the production is growing at a rate of around 4.5 percent. The per capita consumption of milk in India also shows a healthy trend, having grown from 110 grams per person per day in the 70s to the current 360 grams per person per day. In the next 5 decades, per capita consumption of milk in India will become equal to that of US and Europe at around 800 grams per person per day. All these facts clearly point out to the growing popularity of milk and the various health benefits it offers.

The organized sector, comprising cooperative organizations and private companies, is processing around 20 percent of the overall milk production in the country. This sector is growing around 10-15 percent overall, with new products such as cream and cheese registering higher growth rate of 20-30 percent. Traditional items such as ghee and butter are growing in the range of 8-10 percent. The growth in organized sector is due to the growing preference for branded products that come with the promise of quality, freshness, purity and affordability. Rise in overall consumption of milk and milk products, is also aiding growth of organized sector.

Liquid milk is the most consumed dairy product in India, followed by other items such as dahi and ghee. Beyond this, there is cheese, butter, buttermilk, and ice-cream. Prices of milk and milk products remained stable throughout 2017, but prices may rise in 2018. Farmers in many states of the country are experiencing a tough situation, as they are not even getting the cost of milk produced. Milk prices had peaked globally in 2014-2015, but after that, the prices have been falling. This is making milk production a burden for many farmers.

However, as milk companies and cooperatives realize the long term implications, it is expected that milk prices will rise in the coming years. This would be a welcome development for farmers, even though consumers may have to shell out a bit more for their daily glass of milk.

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