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Without Big Dairy Cow Farms Cheese Production is not Profitable

Cheese is traditional food in Georgia. Accordingly, those who own cattle and livestock in the rural areas (cow, buffalo, sheep, goat) almost all of them produces cheese.

Although the tightening of food safety issues made it necessary to open cheese factories, which meet the safety rules of modern food and international standards.

The cheese consumption in Georgia increases annually.  It is increasing not only the volume of cheese produced in household farms, as well as the number of cheese produced by factories.

It must be noted, that in the total cheese production the share of produced cheese in the family industries is very high. For example, in 2015 in total cheese production, the share of cheese produced in family farms amounted 93 % and only 7 % was the share of cheese produced by the factories.

In 2015, the capacity of cheese produced in family farms compared with 2014, was increased approximately by 7 % and amounted to 63.8 thousand tones.

As for the cheese produced in cheese factories in 2015 compared with 2014, growth of production was more than 100% and amounted to 4708.4 thousand tones, while in 2014 the cheese factories in Georgia  totally produced 2282.7 thousand tones.

It should be stated that in 2015 the total cheese production in Georgia amounted to 68.5 thousand tones.

The basic problem in Georgia is the lack of milk.  We do not possess the large farms of dairy cows. Correspondingly, we don’t have stable supply channels of milk and stable price.

Most of the factories are making cheese from the milk powder, because the cost price of cheese made from milk is high.

On the market during the year, the price of 1kg. of natural milk  ranges from 0.8-to1.2 Gel.  In order to get 1 kg. of Imeretian cheese is needed 8-10 liter of natural milk (the exact capacity in litres depends on the milk fatness).

Let’s say, we buy 1 litre of milk for 1 Gel and at the same time this milk is quite fatty, in order to 1kg. of cheese we needed 8 litres of milk. In such case the cost price of cheese exceeds up to 8 Gel. Therefore, this product will not compete with cheese producers who consume milk powder. Accordingly, the production will be unprofitable.

Finally, it must be noted that, until there is not made farms of big dairy cows in Georgia and the milk is not be cheapened, the production of Imeretian cheese from natural milk will be unprofitable.

Article by Irakli Chikava, Agro Solutions