By Parv Badjatiya · 2026-06-24

Milk Prices May Rise 3-4% More by July as El Niño Threatens Fodder — What Feed Buyers Should Watch

Indian milk prices, already lifted 2–3% in May 2026 by major dairy companies, could see another 3–4% increase by July or August if El Niño conditions weaken the monsoon and worsen fodder shortages, according to dairy industry executives quoted by the Times of India on 20 June 2026.

For Indian dairy farmers and feed mill operators, this is the early signal of a cost chain that runs from rainfall → fodder yield → cattle feed prices → milk prices. The early movements are already showing up in our daily wholesale price tracker — and the next 4–6 weeks will determine whether the price rise reported by TOI extends through the rest of 2026.

2–3%

May 2026 milk price hike (already done)

3–4%

Potential further July hike (Parag forecast)

₹2/L

Amul + Mother Dairy May 2026 hike

Procurement price rise over past year

What Parag Milk Foods said

Parag Milk Foods chairman Devendra Shah, as quoted by TOI (via ET):

"Milk prices have already increased by around 2–3% and, if rainfall remains below normal in key milk-producing regions, a further 3–4% increase is possible by July."

This is the clearest forward guidance any major Indian dairy CEO has put on the record this monsoon season. Parag, while smaller than the cooperative giants, runs commercial dairy operations across Maharashtra, Andhra Pradesh, and Haryana — squarely in the geography most exposed to a weak monsoon.

Maharashtra government has already moved

The Maharashtra state government is the first state to publicly flag the risk. Kiran Patil, Animal Husbandry Commissioner of Maharashtra, told TOI:

"The possibility of a fodder shortage in the near future cannot be ruled out due to El Niño. To ensure this situation does not affect livestock and milk production, all livestock farmers in the state should remain alert from now on and plan for fodder crops."

This is a meaningful policy nudge. Maharashtra is India's largest milk-producing state by volume (after UP) and the home of several large dairy cooperatives. State-government-level fodder planning advice in June is unusual and signals the seriousness with which the agriculture department is treating the El Niño forecast.

Several dairy companies have reportedly begun working with their farmer suppliers on fodder planning in response.

Amul and Mother Dairy — more cautious

The two largest dairy brands in India have so far adopted a wait-and-watch position rather than echoing Parag's forecast directly.

Jayen Mehta, MD of Amul (GCMMF), told TOI:

"There is no immediate impact of El Niño on the availability of milk."

Mehta added that deficient rainfall generally affects only certain regions rather than the entire country, and Amul will wait to assess monsoon progress before any further price revision.

Jayatheertha Chary, MD of Mother Dairy, said the company is "closely tracking conditions across its procurement network" and preparing mitigation measures wherever required.

Tamil Nadu's state-run Aavin has reportedly already reduced supplies due to heatwave-related production impacts — confirming that the southern dairy belt is already feeling pressure even before monsoon performance can be assessed.

The May price hike is already behind us — the next move is the watch

On 1 May 2026, both Amul and Mother Dairy raised milk prices by ₹2 per litre — Amul citing a 2.5–3.5% increase per litre and Mother Dairy noting that procurement prices paid to farmers had risen 6% over the past year. The drivers cited: rising procurement costs, higher cattle feed expenses, packaging costs, and fuel prices. The July decision will depend almost entirely on monsoon performance in June–August.

The causal chain — why El Niño matters to milk prices

For farmers and feed buyers who haven't followed this story before, here's how a weather forecast becomes a milk price hike:

El Niño weakens the southwest monsoon. Above-average Pacific Ocean surface temperatures (the El Niño phase of ENSO) historically correlate with below-normal Indian summer monsoon rainfall.
Below-normal rainfall reduces fodder yields. Kharif fodder crops (maize, jowar, bajra grown for fodder; berseem in the rabi season that follows) need monsoon water to grow. Below-normal rainfall reduces both green-fodder availability for direct grazing AND silage/hay reserves for the dry season.
Reduced fodder supply forces farmers to cut herd numbers. With less feed available, smallholders sell or cull animals, reducing the national milking herd.
Less milk gets produced. A smaller herd plus heat-stressed animals (which eat less and produce less, see our heat stress in dairy cattle guide) drops the supply side.
Concentrate feed prices rise — when farmers can't get enough green fodder, they buy more compound feed, DORB, maize, and oilseed cakes. Demand rises faster than supply, prices climb.
Milk processors face higher procurement costs. Cooperatives and private dairies must pay farmers more to keep supplying milk, even as their own collection volumes drop.
Consumer milk prices rise — to recover the procurement cost increase and protect margins.

Each link in the chain takes 6–10 weeks to flow through. A weak June 2026 monsoon shows up in milk prices around August–September.

The five-stage causal chain from an El Niño climate signal (Pacific Ocean surface temperature anomaly) to a consumer milk price hike in India. Each link in the chain takes 2–6 weeks to play through; the total lag is roughly 8–14 weeks. The cattle feed market — protein cakes especially — is the earliest observable price signal, moving 4–8 weeks before milk prices do.

What our daily price data is already showing

The early-warning signal isn't milk — it's the cattle feed market. Looking at our daily wholesale price tracker over the last 6 days (18–24 June 2026):

Ingredient	18 Jun	24 Jun	Change
Soybean meal	₹60.00/kg	₹61.00/kg	+1.7%
Mustard DOC	₹26.00/kg	₹26.30/kg	+1.2%
Groundnut cake	₹38.00/kg	₹41.00/kg	+7.9%
Maize	₹23.00/kg	₹23.00/kg	0.0%
Cotton seed cake	₹45.00/kg	₹44.50/kg	−1.1%

The protein-cake side of the market is firming meaningfully. Groundnut cake at +7.9% in six days is the standout — consistent with feed buyers pulling forward stock before they expect supply tightening. This is exactly the early-mover pattern you'd expect if industry insiders are positioning for an El Niño / weak-monsoon scenario.

This data isn't a forecast — it's what the market is already doing. If you're a feed mill or a high-yield dairy operation, the cost pressure is already starting.

What dairy farmers should do this week

The Maharashtra Animal Husbandry Commissioner's advice — "plan for fodder crops" — is correct but generic. Here's the practical version for Indian dairy farmers in the next 2–4 weeks:

1
Audit your fodder stock for the next 90 days
Count silage bags, hay stacks, and standing fodder crops. Compute days of supply at current herd size. If you have under 60 days of buffer, you're already behind. See silage making for cattle for emergency silage protocols.
2
Lock in early-monsoon fodder seed
Order maize, jowar, bajra fodder seed NOW for early-July planting. If El Niño is real, late-monsoon planting may not have time to establish before October. Bajra and jowar are more drought-tolerant than maize — favour them this season.
3
Consider hydroponic green fodder as a buffer
A 100 sq ft room produces 50 kg/day of fresh fodder year-round, independent of rainfall. See hydroponic green fodder for Indian dairy. 1–2 lakh rupees of setup cost pays back in 1–2 years even in a normal year, and faster in a drought year.
4
Buy 30 days of concentrate now, not in August
If the feed market is firming (it is), buying ahead at today's prices is cheaper than buying at August prices. But mind monsoon storage moisture — see our new monsoon dairy management guide for safe storage practices.
5
Don't cull mature productive animals reflexively
The classic mistake: as fodder gets expensive, smallholders sell their best mature cows because feeding them is "too costly." In a weak-monsoon year, those same animals will sell at distress prices and you'll struggle to replace them at the post-drought rebuild. Better to push intensive feeding management on lactating cows than to thin the herd.

What feed mill operators and traders should watch

A different set of considerations:

Hold more inventory than usual for July–August. A 30–45 day buffer instead of the typical 20–25 day buffer protects against price spikes and supply tightening.
Diversify protein sources. If soybean meal firms further, switch a portion of formulations to mustard cake and cotton seed cake. See oilseed cake vs DOC for the substitution economics.
Pre-book fodder ingredients with farmers. Mills with direct farmer relationships have a meaningful procurement advantage in tight years. Now is the time to lock contracts.
Watch the IMD monsoon updates carefully. The Indian Meteorological Department issues monthly monsoon performance reports — the July update will be the most important data point for whether the Parag projection holds.

What to watch in the next 30 days

Three indicators that will tell us whether the Parag forecast is bearing out:

IMD's July monsoon performance report — particularly rainfall distribution across the kharif fodder belts (Maharashtra, Karnataka, MP, UP)
Daily oilseed cake and soybean meal prices — see our daily price tracker. A further 5–10% rise across the protein-cake complex is the price signal that the feed-cost element of the milk-price-hike thesis is confirming.
Amul's next price-revision announcement — Amul tends to move late but heavily. A second ₹2/litre move from Amul in August would mean the Parag forecast was right.

The honest framing: this isn't a certainty. Amul's "wait and watch" stance is genuinely defensible because Indian monsoon distribution is rarely uniform — north India can flood while western India dries. The next few weeks of IMD data will tell us which scenario we're in.

For dairy farmers and feed buyers, the cost of preparing for the bad scenario (extra fodder, locked-in feed, hydroponic buffer) is small. The cost of being wrong if it happens — distress sales, drought feeding, milk loss — is large. The asymmetry favours preparation.

Source

This article is based on Times of India business desk reporting on 20 June 2026, with original analysis from cattlefeed.info using our daily price data and cross-references to our heat stress, monsoon dairy management, silage making, and hydroponic green fodder guides.

Quotes attributed to dairy executives and the Maharashtra animal husbandry commissioner are as reported by Times of India. Forward-looking statements are forecasts, not certainties — actual price moves will depend on monsoon performance.