Russia's Dairy Industry in 2023

Russia continues to be a significant force in the global dairy market, with an annual milk production capacity of approximately 31 million tons. Despite a 4.3% decline in the dairy cattle population, the country's processing capabilities remain robust, handling around 21 million tons of milk each year. This supports the production of 1.1 million tons of cheese and 1.6 million tons of milk powder and whey.

Key Production and Processing Enterprises

The Russian dairy sector is bolstered by major enterprises such as the Moscow Dairy Plant, St. Petersburg Dairy Combine, Udmurt Dairy Complex, Krasnodar Milk Processing Plant, and Irkutsk Dairy Plant. Additionally, key farms including Miratorg Agribusiness Holding, Efko Group, Rusmolco, Eridan Group, and the Agrocomplex named after N.I. Tkachev play crucial roles in milk production.

Export and Import Dynamics

In 2023, Russia exported approximately 800,000 tons of dairy products while importing around 1.2 million tons, valued at about USD 9.7 million. Belarus and Kyrgyzstan are pivotal import sources, with Belarus contributing 94% of imports. Notably, exports to the UAE increased 7.7 times, and Russia remains a key supplier to Kazakhstan and Georgia.

Significant Events and Trends

A significant event was Danone's exit from the Russian market in March 2024. TH Group plans a USD 204 million investment in a new dairy plant in the Far East, and EkoNiva expanded its operations to 70 regions by 2024. There is a noted increase in butter imports from Kyrgyzstan and a 6% rise in domestic dairy consumption. Raw milk production grew by 2.5%.

Market Dynamics

Retail sales of dairy products saw a 2.8% decline in volume from September 2024 to August 2025, but the market expanded in monetary terms due to rising prices. Rosstat reported a 34% increase in butter prices and a 22% increase in milk prices in the first seven months of 2025. Butter production rose by 2.1% in 2025, reaching 340.9 thousand tons, although domestic demand fell by 6.7%. Warehouse stocks of butter increased by 83%.

Ice Cream Production and Exports

Ice cream production in Russia decreased by 17.1% in January-February 2026 compared to the same period in the previous year, totaling 58.1 thousand tons. Exports to China in the first quarter of 2026 decreased sharply, falling 27 times compared to the previous year.

Innovations and Strategic Focus

Dairy producers are increasingly focusing on food service and ready-to-eat sectors as strategic sales channels. The National Union of Milk Producers highlights that HoReCa and the ready-to-eat market account for about 10-15% of total dairy production in Russia. President Vladimir Putin has imposed restrictions on Tetra Pak packaging imports from Asia to support domestic manufacturers.

Supply Chain Challenges

Russian strikes have disrupted established delivery arrangements. Strikes on retail distribution centers and warehouses in Ukraine have led to significant disruptions in the dairy supply chain, requiring companies and retailers to reorganize deliveries and manage additional costs.

Animal Health and Quarantine Measures

In the Irkutsk municipal district, the spread of contagious nodular dermatitis among cattle is expanding. A quarantine was established by the decree of the governor of the Irkutsk region on September 3, 2026. Veterinary posts were established in settlements, prohibiting the export of animals, milk, slaughter products, and feed, as well as grazing and the movement of transport not involved in the elimination of outbreaks.

Market Influence and Developments

Russia's dairy products impact the Kazakh market, with Russian milk being cheaper than Kazakhstani milk, affecting local pricing. The country also influences butter prices in Kazakhstan, with low prices leading to market saturation. The Russian market is opening to Indian dairy suppliers. Russian dairy-processing facilities are undergoing broad operational re-equipment and require machinery, packaging systems, and maintenance services from alternative suppliers.

Milk production in Russia has stopped growing, and consumer demand is still recovering after price increases. The situation with milk in Russia remains profitable in most regions, although production growth has halted due to epizootic issues and reduced government support.

The Semikarakorsk Cheese-Making Plant in the Rostov region was added to Saudi Arabia's approved list. Russia’s dairy-export revenue exceeded $500 million in 2025, with main export categories being cheese, curd cheese, fermented milk products, and ice cream.

Governmental and Administrative Actions

The Kremlin has taken control of Nestlé's operations in Russia, transferring control to a state-appointed administrator. A presidential decree published on September 17 named Nestlé Russia as subject to temporary external administration. A presidential decree has also placed Russian subsidiaries of major European food manufacturers and retail distributors under temporary external administration, affecting six food plants and grocery networks operating across more than 230 locations in 100 cities.