Milk pricing system in Iran: challenges and solutions

Objective of this study was to investigate milk production cost, milk sale price and pricing system of Iran in comparison with other countries. To do this, production data and economic information gathered by news and information technology of Iranian poultry and livestock industries ( ITPNews), Animal Breeding Center of Iran, Iranian National Standards Organization, Iran Dairy Industries Society, International Dairy Federation and International Farm Comparison Network (IFCN) Dairy in 2015, were used. Ignoring milk protein, somatic cell count and temperature as well as occasional and inappropriate payment for milk fat and total bacterial count along with low base levels for standard milk fat (3.2) and protein (3.0) percentages comparing with international averages ( 3.8 % fat and 3.3% protein) were the main drawbacks of Iran current milk payment system. The results showed that because of paying less attention to the quality, the difference in raw milk payment price was about US$ 0.04. However, it was roughly US$ 0.07 higher that the IFCN milk price indicator. Nevertheless, the IFCN milk: feed price ratio showed that Iran dairy farms similar to international ones were not in a sustainable situation. Finally, to solve the issues, a (compositional and hygienic( quality based milk payment system has been presented. Results obtained in the study can be useful to improve interactions between dairy farmers and factories.