India likely to produce record 140.6 mn tonnes milk in 2014: Report

NEW DELHI: Milk output is likely to expand by 4.5 per cent to reach a record 140.6 million tonnes in 2014 calendar year on a normal monsoon, increased demand for dairy products and rising consumer income, says a USDA report.

Milk production in India, the world's largest producer and consumer, is estimated to have declined marginally to 134.5 million tonnes in the current year, it added.

"Strong farm-gate prices and rising demand for value-added products are stimulating increased milk production. Growing private investment in dairy processing facilities is providing further impetus," the US Department of Agriculture (USDA) said in its latest report.

Milk production is forecast to be at a record 140.6 million tonnes in 2014 calendar year, while production of Non Fat Dry Milk (NFDM) is likely to increase by 19,000 tonnes to 4,89,000 tonnes in the same period, it said.

The USDA estimated production of combined butter and ghee (clarified butter) to increase approximately by 3 per cent to 4.88 million tonnes in 2014, as against 4.74 million tonnes this year.

India's milk consumption is set to match with its production level in 2014, while domestic consumption of NFDM is pegged at 4,25,000 tonnes assuming increased exports and little imports this year, the report said.

Quoting industry estimates, the USDA report said the Indian dairy consumption market has grown at an annual rate of 6.8 per cent over the last decade.

"The major factors driving growth in milk consumption are increased demand due to population growth, greater affordability due to increased disposable incomes, increasing awareness and availability of dairy through retail and food service segments and increased consumer interest in high protein diets," the report said.

Of the milk produced, 40 per cent is used or consumed on-farm, and 60 per cent is sold. Industry sources report that of milk sold 70 per cent goes through the unorganised sector, and only 30 per cent via the organised sector, it added.