Ukrainian Dairy Industry Overview
The Ukrainian dairy sector is a vital part of the nation's agricultural framework, contributing significantly to both domestic consumption and international exports. In 2023, the industry produced approximately 8.1 million tons of milk, highlighting its substantial role in the global dairy market.
Milk Production and Processing
Out of the total milk production in 2023, around 4.5 million tons were processed within Ukraine into various dairy products, such as cheese, milk powder, and whey. Cheese production reached approximately 200,000 tons, while milk powder and whey each accounted for 150,000 tons.
Dairy Cattle and Goats
The dairy cattle population was estimated at about 1.5 million in 2023, with the total cattle population, including both dairy and beef cattle, projected to reach around 2.294 million by the end of 2024. The goat milk sector remains less developed.
Key Enterprises in the Dairy Market
Prominent dairy processing companies in Ukraine include Terra Food, Lactalis Ukraine, Milk Alliance, Yagotynsky Butter Plant, and Kherson Dairy Plant. Notable dairy farms consist of Astarta Holding, Mriya Agro Holding, Nibulon Agro, Kernel Holding, and Ukrlandfarming.
Export and Import of Dairy Products
In 2023, Ukraine exported approximately 500,000 tons of dairy products, primarily targeting markets in the EU, China, and the Middle East. Key exports included cheese, milk powder, and whey, generating export revenue of $296.8 million, a 16% increase from the previous year. Imports totaled about 80,000 tons, focusing on cheese and butter mainly from the EU and neighboring regions.
Significant Events Influencing the Dairy Industry
Recent years have seen pivotal developments within the Ukrainian dairy industry. By June 2024, raw milk prices rose to 35.51 euro cents per kg due to increased procurement costs. Demand surged in the EU and China during 2023 and 2024, while geopolitical tensions impacted supply chains, boosting exports of products like butter, cheese, and buttermilk. Despite infrastructure challenges from Russian drone attacks, Ukraine continues to negotiate with the EU to amend tariff quotas.
Cheese exports increased by 40.3% in the first ten months of 2024 compared to 2023. From January to August 2025, overall dairy exports grew by 13% in physical terms and 49% in monetary terms. Procurement prices for raw milk remained stable despite falling demand and prices for exchange-traded dairy products in Europe and the USA. A significant increase in butter exports to Kazakhstan was noted, with Ukrainian butter imports increasing by 3.7 times to 375 tons, capturing 10% of the market.
New Developments
Ukrainian dairy companies are investing in new hard cheese production facilities. Agroprodservice and Molokiya are collaborating to establish a hard cheese production plant, marking a new business direction in the agro-industrial sector. By 2025, 125 new dairy farms are expected to be built, with milk processing volumes exceeding 3.5 million tons.
Ukrainian dairy producers are also exploring the possibility of resuming full-scale dry milk exports to Japan, following renewed permissions for dairy product exports to this market.
The Ukrainian dairy sector faces challenges such as weakening domestic demand, falling commodity prices, and increased cheese imports, which may transform Ukraine from an exporter to a net importer of dairy products. Ukraine is facing a surplus in butter amid declining exports and rising imports, dealing with an oversupply of approximately 10,000 tons of butter in storage. This situation is exacerbated by shrinking exports and increased imports. Butter prices have been declining, affecting raw milk purchase prices and pushing dairy farms to operate at cost.
Ukraine's dairy market is set to experience another price increase in early 2026. Analysts predict that milk, butter, and fermented dairy products will see a price hike of 7-10% in January 2026. Over the past year, retail prices surged by 15-25% due to escalating production costs, including feed, energy, labor, transport, and packaging.
Modified: 2025/12/16