Russia's Dairy Industry in 2023

Russia continues to play a significant role in the global dairy sector, boasting a strong milk production capacity of around 31 million tons annually. Despite experiencing a 4.3% decline in the dairy cattle population, the country maintains its processing capabilities at approximately 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

Major enterprises contributing to Russia's dairy sector include the Moscow Dairy Plant, St. Petersburg Dairy Combine, Udmurt Dairy Complex, Krasnodar Milk Processing Plant, and Irkutsk Dairy Plant. Key farms such as Miratorg Agribusiness Holding, Efko Group, Rusmolco, Eridan Group, and the Agrocomplex named after N.I. Tkachev are pivotal 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 remain crucial import sources, with Belarus accounting for 94% of imports. Export growth is notable, with shipments to the UAE increasing 7.7 times, and Russia continues to be a significant supplier to Kazakhstan and Georgia.

Significant Events and Trends

Noteworthy developments include Danone's exit from the Russian market in March 2024 and TH Group's planned USD 204 million investment in a new dairy plant in the Far East. EkoNiva expanded its operations to 70 regions by 2024. There is an increase in butter imports from Kyrgyzstan and a 6% rise in domestic dairy consumption. Raw milk production has grown by 2.5%.

Market Dynamics

Retail sales of dairy products experienced a 2.8% decline in volume from September 2024 to August 2025, although 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 and Consumption

Butter production in Russia rose by 2.1% in 2025, reaching 340.9 thousand tons, though domestic demand fell by 6.7%. Warehouse stocks of butter increased by 83%. At the start of 2026, the Russian butter market shows a growing imbalance between production, consumption, and stock levels.

Ice Cream Production and Exports

In January-February 2026, ice cream production in Russia decreased by 17.1% compared to the same period last year, totaling 58.1 thousand tons. Russian ice cream exports to China in the first quarter of 2026 showed a sharp decline, decreasing by 27 times compared to the same period last year.

Innovations and Strategic Focus

Dairy producers are increasingly viewing food service and ready-to-eat sectors as strategic sales channels. The National Union of Milk Producers notes 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 centres 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. Quarantine was established by the decree of the governor of the Irkutsk region on September 3, 2026. Veterinary posts were established in the 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.

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.