With Amul announcing a hike of Rs 2-4 per litre in milk prices from Thursday, November 12, concerns are mounting over rising milk production costs and tightening supplies in the country. The latest price revision comes amid growing pressure on India's dairy sector, with the possible impact of El Nino expected to worsen fodder shortages and slow milk production growth next year.
Earlier, Mother Dairy, one of the largest milk suppliers in Delhi-NCR, had also announced a price increase of Rs 2-4 per litre, effective November 12. Karnataka's dairy cooperative brand Nandini has also raised milk prices by Rs 8 per litre, adding to the burden on consumers.
ALSO READ: After Mother Dairy, Amul Raises Milk Prices By Rs 2-4 Per Litre From November 12; Check New Rates
The series of price increases has come at a time when the industry is grappling with rising input costs and concerns over availability of animal feed. In the latest report of the United States Department of Agriculture (USDA), the potential slowdown in India's milk production growth is expected to be 2 per cent in 2027 due to fodder crunch and El Nino impacts.
El Nino activity is forecast to last into February-March next year, which could influence fodder availability and livestock production.
Two per cent growth in milk production in 2025-26, thanks to a good monsoon last year, will help to maintain the annual growth rate of milk production at 2.5 per cent in 2026. However, this growth rate is unlikely to sustain for the next year. Higher fodder prices due to feed shortages would increase milk production costs.
India's Milk Production Growth May Slow To 2 per cent In 2027
According to the USDA report, milk production in India could increase by just 2 per cent to 226.5 million metric tonnes in 2027. Despite being the world's largest milk producer, India continues to record lower milk production per animal than several other countries, even as its livestock population increases.
Nearly 95 per cent of the country's milk producers own between one and five animals, while around 80 million rural households are involved in dairy activities. The sector contributes approximately 5 per cent to India's Gross Domestic Product (GDP), making it an important source of rural income.
Fodder Shortage Could Deepen Due To El Nino
Fodder availability remains one of the biggest challenges facing India's dairy sector. The Indian Grassland and Fodder Research Institute (IGFRI) estimates that the gap between demand and availability ranges from 11-32 per cent for green fodder. The shortage stands at 23 per cent for dry fodder and 28-40 per cent for concentrated feed.
If the impact of El Nino continues, the existing fodder crisis could deepen, putting additional pressure on livestock farmers and milk production.
Milk Demand To Remain Strong Despite Production Slowdown
Even while production growth may slow down, the demand for milk and dairy products within the country is likely to hold steady in 2027. With income levels increasing, along with urbanisation and the proliferation of organised retail markets, fluid milk demand may reach around 95 MMT.
Concurrently, milk for processing is expected to total 131.5 million tonnes. Butter production is expected to increase by 2.2 per cent to 7.6 million tonnes and skimmed milk powder production is projected to increase 2.5 per cent to 810,000 tonnes.
India's Dairy Exports May Decline In 2027
The gap between demand and supply could also affect India's dairy exports. Butter exports are projected to decline from 45,000 tonnes to 40,000 tonnes in 2027, while skimmed milk powder exports could fall from 15,000 tonnes to 7,000 tonnes.
Milk exports are also expected to decrease from 30,000 tonnes to 25,000 tonnes, according to the projections.