Increase of 18 rupees per liter in 2 years: Why did the price of milk catch fire?

Milk is becoming more expensive in the country. In the last two years, the prices of some milk variants of Amul and Mother Dairy have gone up by Rs 18 per litre. On 12 November 2026, both the companies have increased the price of milk by Rs 2 to Rs 4 per litre. The price was hiked earlier this year as well. The question is why milk prices are continuously increasing? Is milk production in the country declining or is there any other reason behind it?

1. Why did Amul-Mother Dairy increase prices?

Amul and Mother Dairy have hiked milk prices from November 12. Amul has increased the price of its toned milk (fresh) by Rs. 2 and gold milk price Rs. 4 per liter has been increased. Mother Dairy has also increased the prices of its different variants by Rs 2 to Rs 4 per litre. According to the companies, the biggest reason for the increase in the price of milk is the rising cost of production and processing. Green and dry fodder have become expensive. Prices of other animal feed items like maize, cakes and jaggery have also increased. Apart from this, the cost of packing milk, fuel and plastic film for transportation has also increased.

According to Amul, its member milk unions have increased the purchase price of milk to farmers by 4 to 5% in the last one year. Mother Dairy said green and dry fodder prices have increased by 20% and animal feed prices by around 10% in many areas. Other costs including packaging and transportation have also increased.

2. Is milk production in the country declining?

One reason milk is expensive is pressure on production and availability. However, government figures do not confirm the decline in milk production in the country. According to the Department of Animal Husbandry and Dairying, India produced 23.93 crore tonnes of milk in 2023-24. It increased to 24.787 crore tonnes in 2024-25. That means production increased by 3.58% in one year.

On the other hand, milk production in India is estimated to be 222 million tonnes in 2026, according to USDA’s October 2026 report. According to the report, it is likely to reach 226.5 million tonnes in 2027. That means the production has decreased by 2 crore tonnes. However, these are American agency estimates, not official Indian government production figures.

3. Weather and fodder prices added to the problem

Cattle diet and climate play a major role in milk production. If the cows do not get enough green fodder, dry fodder and nutritious feed, their milk yield can be affected. Amul said availability of fodder has been affected due to low and uneven rainfall in Gujarat and many parts of the country. Due to which the cost of farmers has increased.

4. The demand for milk is continuously increasing in India as well.

Milk prices affect not only production but also demand. India is the largest producer and consumer of milk in the world. Apart from drinking milk directly, milk is also used to make curd, cheese, ghee, butter, sweets and other dairy products.

According to a USDA report, domestic milk consumption in India is estimated to be around 221.9 million tonnes in 2026. About 93 million tonnes of milk is estimated to be consumed directly and 129 million tonnes of milk is estimated to be used in factories. That is, a large amount of milk is also consumed in making dairy products. Demand for milk and its products is also increasing due to increasing population, expansion of cities and increase in income of people. If demand increases rapidly and production does not increase at the same pace, prices remain under pressure.

5. How does expensive milk get from farmers to consumers?

The rise in milk prices does not only affect consumers. This is also directly related to the income of the herdsmen. According to Amul, in its cooperative model, about 80% of revenue from consumers reaches 36 lakh milk producers. Mother Dairy also spends an average of 75-80% of its sales revenue on buying milk from farmers. In June 2024, the company hiked the price of milk by Rs 2 per liter, saying the decision was taken due to the increase in production costs of cattle farmers.

That is, the reason behind the high cost of milk is not only the profits of the companies but also the many costs incurred by the farmers such as better purchase price of milk, fodder, animal feed, packaging and transportation. About 95% of milk producers in India have one to five animals. In such a situation, increase in cost of fodder and animal care affects even small livestock farmers. That is, despite the increase in milk production in the country, maintaining a balance between its availability and price is a major challenge before the dairy sector. Unless work is done to increase animal productivity and reduce the cost of fodder, it may be difficult for consumers to find relief in milk prices.