Tamil Nadu’s state-run dairy cooperative Aavin Federation has reported an unaudited loss of around ₹120 crore for FY 2025–26, contributing to a combined loss of approximately ₹143 crore along with seven district milk producers’ unions—its weakest financial performance since the COVID-19 pandemic. While the federation accounted for ₹120 crore of the loss, seven district unions—Coimbatore, Krishnagiri, Virudhunagar, Tirunelveli, Kancheepuram-Tiruvallur, Tirupattur and Theni—reported a combined loss of ₹23 crore, whereas the remaining 20 district milk unions posted a profit of ₹53.2 crore.
Officials attributed the losses to continued sale of milk at subsidised prices despite rising production costs, coupled with a sharp decline in milk procurement, which has fallen from around 36 lakh litres per day in 2024–25 to about 31–32 lakh litres per day, creating a daily shortfall of nearly 4 lakh litres.
The reduced milk availability has also affected the production of higher-margin value-added products such as ghee, butter, curd and ice cream, while forcing Aavin to increasingly reconstitute milk using skimmed milk powder and butter, pushing production costs above retail selling prices. The financial setback highlights the growing pressure of balancing affordable consumer prices with sustainable farmer procurement, underscoring the urgent need to strengthen milk procurement, improve operational efficiency and enhance value addition to restore the long-term financial health of Tamil Nadu’s dairy cooperative sector. (newindianexpress.com)
Source: Dairynews7x7 29 July, 2026 Read full story here
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