Consider the following statements regarding the structural dynamics of India's dairy sector:

Statements

1. In India's dairy economy, farm-gate procurement prices for raw milk are influenced by input costs such as cattle feed and fodder availability, which in turn affect the prices farmers receive.
2. Because liquid milk is a relatively homogenous commodity with thin margins, dairy companies that derive a larger share of revenue from liquid milk typically have less pricing flexibility compared to those focused on value-added products such as paneer, ghee, and butter.