Russia's Dairy Market: A Comprehensive Overview

Dairy Cattle and Milk Production

As of 2023, Russia was home to approximately 8.2 million dairy cattle, producing around 31 million tons of milk annually. This substantial volume reflects the country's robust dairy farming infrastructure, supporting an expansive dairy industry.

Milk Processing and Cheese Production

Russia processes about 21 million tons of milk each year, demonstrating its significant milk processing capabilities. Cheese production is a key component, totaling approximately 1.1 million tons annually. Additionally, the production of milk powder and whey reaches about 1.6 million tons per year, highlighting the industry's diverse processing capabilities.

Key Dairy Enterprises

Major Dairy Plants

• Moscow Dairy Plant
• St. Petersburg Dairy Combine
• Udmurt Dairy Complex
• Krasnodar Milk Processing Plant
• Irkutsk Dairy Plant

Leading Dairy Farms

• Miratorg Agribusiness Holding
• Efko Group
• Rusmolco (Russian Milk Company)
• Eridan Group
• Agrocomplex named after N.I. Tkachev

Export and Import of Dairy Products

In 2023, Russia's dairy exports reached approximately 800,000 tons, whereas imports stood at about 1.2 million tons. This export-import dynamic indicates Russia's active participation in the global dairy market and a domestic supply-demand imbalance. Furthermore, Russia imported 2,343 tonnes totalling USD 9.7 million.

Significant Events in the Dairy Industry

• Danone's Exit: On March 22, 2024, Danone exited the Russian market, incurring an estimated loss of €1.2 billion, reshaping the competitive landscape.
• TH Group's Entry: Vietnamese TH Group plans a $204 million investment in a Russian Far East dairy plant.
• Unilever Acquisition Approval: Russian FAS approved the acquisition of Unilever Rus for about $340-450 million.
• EkoNiva's Expansion: Expanded its reach to 70 regions by 2024.
• Butter Imports: An 18% increase in butter imports from Kyrgyzstan while maintaining stable price fluctuations.
• Domestic Consumption: A 6% rise in domestic dairy consumption with a 2.5% increase in raw milk production in early 2024, suggesting potential shortages.
• Global Trade Engagement: Ongoing collaborations with Kazakhstan and butter importation from the UAE.
• Food Embargo Extension: The embargo has been extended until the end of 2026.
• Price Increases: Butter prices increased by 5.04% in November 2024.
• Conflict Impact: Ukrainian dairy farm damage from Russian drone strikes.
• Export Growth: A 20% increase in dairy exports brought revenues to $370 million by the first 11 months of 2024.
• Sovecon Forecast: A reduction in the forecast for 2025 wheat production.
• Ice Cream Exports: Reached $55 million by November 2024, a 15% increase.
• Kumis Consumption: Increased by 67% in 2024.
• Sberbank Withdrawal: The bank withdrew from subsidized agriculture lending programs.
• Bilateral Agricultural Cooperation: Enhanced relations with Iran and the entry of Uruguay in the Russian dairy market.
• U.S. Assurance: The U.S. assured Moscow of assistance in restoring access to global markets for Russian grain and fertilizer exports.

Overall, in 2024, the Russian dairy market witnessed challenges due to declining cattle numbers and a slow production increase, causing potential shortages and price hikes. Nonetheless, the sector remains globally active, with substantial export growth and a continual expansion of its cheese industry amid geopolitical adjustments. Vietnam's TH Group plans to open a dairy plant in Russia's Kaluga Region in May. Notably, Russia was excluded from the tariff list.

Irina Ivanova noted that the consumption of kefir and cottage cheese is gradually declining in Russia. This is confirmed by data from retail chains.

Modified: 2025/04/14

---