CHENNAI: After more than three years, Aavin’s average daily milk procurement has reached 36 lakh litres, thanks to the increased milk production and a cut in procurement rates by private companies.
The figure excludes the 4 lakh litres milk received at milk cooperative societies in villages but sold locally in the respective villages. The last time Aavin’s procurement reached 37 to 38 lakh litres a day was during the Covid-19 lockdown from May to December 2020.
Sources said dairy farmers, who had switched to private companies for higher procurement prices last year, have returned to Aavin after those companies unilaterally cut their prices by Rs 3 to Rs 7 a litre since the first week of June. Moreover, Aavin’s efforts to facilitate loans for its suppliers through the Kisan Credit Card (KCC) and cooperative banks, along with the creation of new village-level milk societies and the revival of several dormant societies, also contributed to the increased procurement.
The present daily procurement of around 36 lakh litres is higher than Aavin’s demand to of 30 lakh litres across the state. Consequently, the production of milk powder, butter, and ghee has increased to full capacity at the Aavin dairy plants after many years. The dairy-cum-powder plant at Ammapalayam in Tiruvannamalai district is now producing butter and skimmed milk powder at 90% to 95% of its total capacity of 20 MT and 12 MT a day respectively.
Until recently, these plants operated at around 40% of their installed capacity. With milk procurement expected to remain high until January-February next year, Aavin is planning to expand the sale of paneer and buttermilk across the state.
S Vineeth, MD of Aavin, told TNIE the dairy cooperative currently has 2,800 MT of butter and 4,200 MT of milk powder in stock. “Butter and ghee will be sold through all our channels without any short supply from now. The plant at Tiruvannamalai is producing butter to its full capacity for the first time. The last time milk procurement reached 36 lakh litre to 37 lakh litre was during the Covid-19 lockdown.”
Apart from Tiruvannamalai, the Aavin dairies at Madurai, Krishnagiri, Erode, and Salem are also converting dry milk into milk powder, with a total daily capacity of 90 MT. The storage capacity for milk powder is 7,805 MT and for butter, it is 4,629 MT.
The large-scale sale of paneer and buttermilk will be launched through wholesale agents across the state, added Vineeth. From January to May, Aavin’s milk procurement had significantly dropped by 5 lakh to 7 lakh litres a day, reducing daily procurement to 25 lakh litre to 26 lakh litre. As a result, Aavin incurred substantial losses by purchasing butter from the open market to reconstitute milk, increase its fat content before selling it to consumers.
Aravind Rajan of Theni, a milk dealer, said, “Private companies have slashed the price by Rs 4 a litre and the incentive by Rs 1 to Rs 2, citing a drop in milk demand. Milk producers who availed loans through banks at 15% interest were disappointed and resumed supply to Aavin.” Aavin purchases cow milk for Rs 38 a litre and buffalo milk Rs 47 from dairy farmers.
