Milky Mist Expands Contract Dairy Farming to Address India’s Milk Supply Gap
Value-added dairy company Milky Mist is scaling up its contract dairy farming model in Tamil Nadu to secure milk supplies, improve farmer profitability and address India’s growing gap between milk demand and production.
The initiative comes as rising production costs, climate-related challenges and declining interest among small dairy farmers continue to impact milk availability across the country.
Rising Costs Challenge Dairy Farmers
Milk producers are facing increasing financial pressure due to higher input costs.
Key challenges include:
🌾 Green fodder shortages have increased feeding costs.
🌧️ Rainfall deficits have raised dairy production expenses by 35–40%.
🐄 Many marginal farmers are reducing dairy activities due to price volatility and declining profitability.
💰 Farmers supplying milk currently receive around ₹35–40 per litre.
India’s Milk Demand Outpaces Production
While India remains the world’s largest milk producer, production growth has slowed.
Key industry trends include:
🥛 Annual milk production growth has declined from 6–7% before 2022 to around 3.5–3.78%.
📈 Milk demand continues to grow at 6–7% annually.
⚖️ The widening demand-supply gap is creating challenges for dairy processors.
Contract Farming Model Gains Momentum
To ensure a stable milk supply, Milky Mist has developed a contract dairy farming programme.
Key developments include:
🏡 Around 500 contract dairy farms established across Tamil Nadu.
🐄 Farms currently house 15–25 dairy animals, with plans to expand to 50–100 cows or buffaloes.
🏦 The company assists farmers in securing bank loans for dairy expansion.
🌱 Farmers are encouraged to cultivate green fodder to improve milk quality and productivity.
Improving Productivity Through Better Nutrition
Milky Mist is promoting scientific feeding practices to enhance dairy performance.
Initiatives include:
🌿 Green fodder cultivation
🥣 Production of silage for year-round nutrition
🥛 Adoption of Total Mixed Ration (TMR) feeding systems
🎯 Incentive of ₹0.50 per litre for higher-quality milk
These measures help improve milk yield, animal nutrition and overall farm profitability.
Supporting Value-Added Dairy Production
Milky Mist currently procures approximately 14 lakh litres of milk per day.
Its daily production includes:
🧀 60–80 tonnes of paneer
🍕 20 tonnes of mozzarella cheese
The company says expanding milk procurement is essential to support its growing portfolio of value-added dairy products while continuing to source milk from both contract and marginal farmers.
Outlook
Milky Mist’s contract farming strategy reflects a broader shift toward organised dairy production in India. By investing in larger farms, improved cattle nutrition and scientific dairy management, the company aims to strengthen milk supply while creating more sustainable income opportunities for dairy farmers.
