The Need for Expansion of the Dairy Industry in Several Regions

Examinations shows that in the province of Illam, Bushehr, Chaahaar Mahaal-o-Bakhtiari, Southern Khorasan, Northern Khorasan, Zanjan, Semnan, Kurdistan, Lorestan, Hamedan and Yazd and the region of Jiroft and Kahnooj, processing capacities are lower than the amount of raw milk production. Therefore, development of the industry in these provinces is recommended. Challenges facing the industry are as follows:

• high prime costs (high costs before processing, which account for about 70% of costs)

• Instability in the price of raw milk (due to interference of the government in determining the market price of, the price experience high fluctuations)

• Dispersion of production centers and for that reason, lack of access to gathering centers (because of the spoilagibility of this product, it is necessary for production site to be near the production site)

• Underutilization of the capacities, and investments done, and consequently, low levels of productivity

• Gap between nominal capacity and production performance of in most production units

• Low quality and standard weakness in dairy products

• Lack of competitiveness in quality of packaging of domestic dairy products in comparison with foreign high-quality dairy products

• Deficiency in gathering technology, maintenance and transportation

3-Demand:

Considering the increasing trend of milk production as well as the rise of population in the country, along with a few fluctuations, per capita raw milk production has reached from 69 Kg in 1360 to about 146.6 Kg in 1391. This indicates an annual growth rate of 4.2%. In addition, investigations household expenditures show that the average expense of milk and dairy products consumption of urban households constitute about 4.9% and 6.3%...

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...of this good due to the cessation of subsidies paid to products of this industry in recent years.

• During the last years, the price of this product has a relative stability before 1390, but in 1390, along with the cut of 500 billion Toomaan subsidies paid to this section, price growth rate of this product sharply increased, in such a way that the increase in price caused 22% reduction in per capita consumption.

• Since dairy products are spoilable, dairy products of Iran has been mainly (85%) exported to Iraq. For this reason, the share of dairy products with less spoilability (yogurt and cheese) is larger in comparison with milk. Moreover, due to characteristics of spoilability, share of dairy product imports from neighboring countries is more than 50%. Imports from other countries are limited to industrial and consumption (for children) powdered milk in general.