Ukrainian Dairy Industry Overview

The Ukrainian dairy sector plays a vital role in the nation's agricultural framework, significantly influencing both domestic consumption and international market dynamics. In 2023, the industry produced approximately 8.1 million tons of milk, highlighting its substantial presence in the global dairy market.

Milk Production and Processing

In 2023, Ukraine processed around 4.5 million tons of milk into various dairy products, including 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 in Ukraine was estimated at about 1.5 million in 2023. The total cattle population, which includes both dairy and beef cattle, is projected to reach approximately 2.294 million by the end of 2024. The goat milk sector remains comparatively underdeveloped.

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 include 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, focusing on markets in the EU, China, and the Middle East. Key exports included cheese, milk powder, and whey, generating export revenue of $296.8 million, marking a 16% increase from the previous year. Imports totaled about 80,000 tons, primarily cheese and butter from the EU and neighboring regions.

Significant Events Influencing the Dairy Industry

Recent years have witnessed pivotal developments in 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, with geopolitical tensions impacting supply chains and boosting exports of products like butter, cheese, and buttermilk. Despite infrastructure challenges from Russian drone attacks, Ukraine continues negotiations 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 notable increase in butter exports to Kazakhstan was observed, 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 exploring the resumption of 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 dealing with an oversupply of approximately 10,000 tons of butter in storage amid declining exports and rising 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, with analysts predicting a 7-10% price hike for milk, butter, and fermented dairy products 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. The dairy market in Ukraine is entering a phase of price decline amidst a growing surplus of raw milk. In November 2025, Ukraine produced 35,000 tons more raw milk than the previous year. The oversupply of dairy commodities has resulted in the production of butter and powdered milk remaining unprofitable. Ukraine is partnering with Saudi Arabia in a $1 billion investment to boost agriculture and dairy production, focusing on enhancing food security and boosting dairy production capabilities in Ukraine, including establishing a large dairy farm and developing a substantial industrial farm in western Ukraine.

Ukraine's dairy industry is experiencing a systemic crisis. Processing enterprises in Ukraine are reducing purchase prices and the volume of raw milk intake, threatening the economic sustainability of dairy farms and potentially leading to accelerated herd reduction. Ukrainian authorities are advised to stimulate domestic cheese production. The Ukrainian market has become a significant export destination for Polish dairy products. Ukrainian dairy company Organic Milk has signed a contract to supply A2 milk to a European distributor. The Ukrainian dairy company Organic Milk plans to significantly increase exports to EU countries in 2026 amid a decline in domestic demand. Ukraine's condensed milk market faced dual pressures — power supply disruptions and declining exports. At the beginning of 2026, Ukraine's condensed milk market experienced production challenges due to power supply disruptions, while exports continued to decline. Domestic demand for long-shelf-life products increased as consumers opted for dairy preserves.

Ukraine's dairy industry is facing a severe profitability crisis. Milk production costs significantly exceed purchase prices, which could lead to a production decrease of up to 20% by fall 2026. Ukrainian businesses continue to function despite threats and are producing high-quality dairy products. The adaptation includes distributed generation in private ownership and targeted support from the EU and other European countries. Ukrainian companies are participating in international exhibitions like Gulfood.

Modified: 2026/03/09

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