Milkfed (The Punjab State Cooperative Milk Producers? Federation), which holds an 80% share in packaged fresh milk market in the state, has seen a 17% increase in its sales over the last one year.
What worries Milkfed, though, is the fall in the supply of milk. While demand for milk is increasing, Milkfed is now grappling to ensure adequate supplies to the state and the union territory.
Ironically, Milkfed is facing a shortage of milk during winters ?traditionally considered to be a time when supplies are abundant. Not this year. The extended summer and the scanty, scattered rain thereafter has led to both late calving among cattle and a shortage of green fodder.
The sales, meanwhile, are robust. Milkfed?s average daily sale of milk?sold under the brand name Verka?stood at 6.26 lakh litres in December 2008 in Punjab and Chandigarh . In December 2009, the figure went up to 7.35 lakh litres.
Managing director Milkfed VK Singh admits that there is a much higher competition at the dairy farmer?s doorstep than before, for procurement of milk.
Owing to shortage of milk, the company has increased the procurement price for farmers thrice in the last one month.
?We are hopeful that we will now be able to attract a larger number of dairy farmers, and procurement will improve,? says Singh.
Following the steady increase in procurement price, Verka has also increased the rate of milk. The price of full cream milk has been increased by Rs 2 per kg, and of other categories by Rs 1 per kg.
?Verka? full cream milk is now priced at Rs 28 a kg as against Rs 26 earlier. Standard milk is now Rs 25, toned Rs 23, and double toned Rs 21 a kg.
Milkfed has reason to worry on procurement. The average daily procurement of milk by Milkfed dropped to 10.6 lakh kgs in December 2009, as compared to 10.9 lakh kgs in December 2008.
Dairy farmers agree that there is a shortage of milk this season due to the prolonged summer. ?Milk production has gone down due to heat stress in animals, late calving and lactation. Due to lack of sufficient rain last year, we are also facing a severe shortage of green fodder. Usually, there is plenty of green fodder available by the end of November,? said Daljit Singh Gill, the owner of a commercial dairy farm at Jagraon.
HS Grewal, General Manager at the Ludhiana Milk Plant of Milkfed, highlights that procurement is difficult this year.
The situation was even worse in the first fortnight of December 2009, when procurement by Milkfed fell to 9.86 lakh litres daily, while during the same period last year procurement was around 10.97 lakh litres daily.
VK Singh says Milkfed hopes to meet the gap by the end of January. Farmers, though, say that despite their best efforts, production this season will not be as good as last year.
Rajpal Singh, owner of a commercial dairy farm in Kular village near Ludhiana, reveals that there has been a considerable increase in the price of green fodder and also animal feed, which includes mustard cakes, de-oiled mustard cakes, de-oiled rice bran, maize etc.
The rates of these products have gone up by Rs 300 to Rs 500 per quintal, he points out.
?Due to an increase in the price of these products, most dairy farmers who supply milk directly to consumers had increased their rates in December itself, ,? Rajpal Singh said.