Russia's Dairy Market Overview

Dairy Cattle and Milk Production: As of 2023, Russia boasts a significant dairy cattle population, with approximately 8.2 million dairy cattle that lead to a milk production volume of around 31 million tons per year. This production capacity underscores the efficiency and scale of Russian dairy farms, making it one of the leading producers globally.

Milk Processing and Cheese Production: Annually, about 21 million tons of milk are processed across various facilities in Russia. A noteworthy portion of this milk, about 1.1 million tons, is dedicated to cheese production, highlighting Russia's position in the cheese market. Additionally, the production of milk powder and whey stands at 1.6 million tons per year, illustrating the advanced processing techniques employed in the country.

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 exported about 800,000 tons of dairy products, while it imported approximately 1.2 million tons, indicating a slight domestic supply-demand imbalance. Additionally, the imported dairy products were valued at USD 9.7 million, suggesting high import costs for certain dairy products.

Significant Events in the Dairy Industry:

• Danone's Exit: On March 22, 2024, Danone exited the Russian market, causing a significant industry impact with an estimated loss of €1.2 billion.
• TH Group's Entry: The Vietnamese TH Group plans a substantial $204 million investment in a new dairy plant in Russia's Far East.
• Unilever Acquisition Approval: The Russian FAS approved the acquisition of Unilever Rus, valued between $340-$450 million.
• EkoNiva's Expansion: By 2024, EkoNiva expanded operations to 70 regions within Russia.
• Butter Imports: An 18% increase in butter imports from Kyrgyzstan was noted amidst price fluctuations.
• Domestic Consumption Rise: A 6% increase in domestic dairy consumption, paired with a 2.5% increase in raw milk production, signaled potential shortages starting in 2024.
• Global Trade Engagement: Russia maintained collaborations with Kazakhstan and initiated new import agreements with the UAE, alongside extending its food embargo till the end of 2026.
• Price Increases: November 2024 witnessed a 5.04% rise in butter prices.
• Conflict Impact: Ukrainian dairy farms were affected by Russian drone strikes.
• Export Growth: Dairy exports grew by 20%, generating revenues of $370 million in the first 11 months of 2024.
• Ice Cream Exports: There was a 15% growth, reaching $55 million by November 2024 in ice cream exports.
• Kumis Consumption Boom: Kumis saw a remarkable 67% rise in consumption in 2024.
• Sberbank Withdrawal: Sberbank withdrew from subsidized agriculture lending programs.
• Bilateral Agricultural Cooperation: Russia strengthened agricultural ties with Iran, while Uruguay entered the Russian market. The U.S. offered assistance to restore Russia's grain and fertilizer export access globally.

Despite challenges such as declining cattle numbers and slow production growth, the Russian dairy market remains a resilient and globally active industry. With strong export growth and substantial changes within its cheese sector, Russia continues to adapt to global demands and domestic consumption trends. The Vietnamese TH Group's investment marks a significant foreign interest in Russia's dairy potential, and consumer trends indicate growing interest in eco-friendly and plant-based milk alternatives.

Modified: 2025/05/10

---