Karnataka's ₹8 a litre increase in Nandini milk prices took effect on November 1, after the state cabinet approved it on October 29. Of the increase, ₹7 a litre goes to farmers and ₹1 to the Karnataka Milk Federation (KMF), which sells the Nandini brand1, 2.
The procurement price paid to farmers rises from ₹35 to ₹42 a litre. With the state's ₹5 a litre incentive, farmers will receive ₹47, Chief Minister D K Shivakumar said3, 2.
Nandini toned milk will sell at ₹54 a litre and Nandini Shubham, which has 4.5% fat, at ₹60, the Chief Minister said on October 313. He defended the decision, saying milk output had fallen because of drought. "Due to drought, milk production has come down," he told reporters3.
What changed in procurement prices
This is the fifth Nandini increase in recent years: ₹3 a litre in November 2022, ₹3 in July 2023, ₹2 in June 2024 and ₹4 in March 20251. Nandini curd prices rose by ₹14 a kg, a decision Shivakumar said rested with the KMF3.
Farmers and cooperatives had asked for more. Shivakumar said producers sought ₹12 a litre3. Animal husbandry minister Krishna Byre Gowda said cooperative representatives pressed for at least ₹10 a litre, and the cabinet settled on ₹86, 2.
Tamil Nadu's state cooperative Aavin announced on October 27 that prices of butter, ghee, UHT milk, packaged sweets and premium curd would rise from the next day7. "A small price revision of milk by-products has become necessary to offset production costs and to keep Aavin products competitive in the market," the cooperative said7. The statement as reported did not give the new prices or the size of the increase7. Tamil Nadu had already raised Aavin's procurement price from ₹38 to ₹44 a litre in September7.
No confirmed revision has been announced by Amul (GCMMF), Kerala's Milma or the Telangana and Andhra Pradesh federations in the reports reviewed for this article3, 7. Shivakumar said Karnataka's farmers were moving their milk to states that pay more3.
Drought, fodder and a slower 2027 crop
The USDA Foreign Agricultural Service's post in New Delhi forecasts India's milk production to grow 2% to 226.5 million tonnes in 2027, slower than an estimated 2.5% in 20264. The post cites El Nino-induced drought conditions that it expects to constrain feed and fodder availability and weigh on animal productivity4.
Butter output is forecast to rise 2.2% to 7.6 million tonnes and skimmed milk powder (SMP) output 2.5% to 810,000 tonnes4. SMP exports are forecast to halve to about 7,000 tonnes as domestic prices stay high4. Processing units are expected to use 131.5 million tonnes of milk and households 95 million tonnes4.
Fodder is the pressure point behind these numbers. Maharashtra earmarked 5% of district annual plan funds for fodder schemes on October 308. It also fixed a reference price cap of up to ₹12 a kg for dry fodder and ₹8 a kg for silage8. It banned the movement of fodder from drought-hit border areas to neighbouring states, and has declared drought in 304 tehsils8.
There are offsets on the supply side. Prime Minister Narendra Modi said on October 30 that the average daily milk yield per animal has risen to around eight litres from less than five litres in FY149.
What dairy companies are paying
Dodla Dairy's milk procurement price rose 15.7% to ₹43.2 a litre in the September quarter, while its realisation rose 8% to ₹61.9 a litre5. Packing material costs rose 41.6%, and net profit fell 44.3% to ₹36.59 crore5. Dodla raised milk prices by ₹2.5 a litre during the quarter, and said the benefit was only partly reflected in the results5.
Milky Mist's whole-time director and chief executive K Rathnam said milk, fodder and feed prices were running 10-11% higher10. He said prices are at a peak and he does not expect an increase in Tamil Nadu, though prices could rise slightly in other parts of the country depending on the weather10.
Where the next revisions may come
Milk prices in India are set by state governments and cooperatives, and are linked to the fat content of the milk supplied11. Karnataka's own comparison points to the direction of travel: the Chief Minister said Nandini Shubham at ₹60 would be below the average of ₹62.80 in 10 other states3. If neighbours were paying more before November 1, the ₹7 increase for Karnataka's farmers narrows that gap, and the next co-op or state revision is most likely where procurement now looks cheapest.
On imports, India's dairy trade is small and subject to tariffs11. India excluded dairy products from tariff liberalisation in its free trade agreement with New Zealand12. It did set an annual quota of 200 tonnes for albumins, including milk-derived proteins, at an in-quota basic customs duty of 10%12. A tight SMP market would therefore not be eased quickly by imports, and the reports reviewed contain no signal that the Centre is preparing duty relief or an import window for dairy4, 12.
For buyers, the signals to track are the next state cabinet or co-op board decision on procurement prices. Co-op price lists for butter, ghee and SMP, and the USDA post's next update on the 2027 crop, are the other markers.