Ukraine's Dairy Industry Overview

The Ukrainian dairy sector holds a vital position within the nation's agricultural framework, playing a crucial role in both domestic consumption and international trade. In 2023, Ukraine's milk production was approximately 8.1 million tons, marking its significant 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, such as cheese, milk powder, and whey. Cheese production reached about 200,000 tons, while both milk powder and whey accounted for 150,000 tons each. This production data underscores the country's advanced dairy processing infrastructure.

Dairy Cattle and Goats

The dairy cattle population was estimated at around 1.5 million in 2023, with the total cattle population, including beef cattle, projected to reach approximately 2.294 million by the end of 2024. The goat milk sector remains relatively underdeveloped in Ukraine.

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 comprise Astarta Holding, Mriya Agro Holding, Nibulon Agro, Kernel Holding, and Ukrlandfarming.

Export and Import of Dairy Products

In 2023, Ukraine exported around 500,000 tons of dairy products, with key markets in the EU, China, and the Middle East. The primary exports included cheese, milk powder, and whey, generating export revenue of $296.8 million, reflecting a 16% increase from the previous year. Imports totaled about 80,000 tons, primarily consisting of cheese and butter from the EU and neighboring regions.

Significant Events Influencing the 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, with geopolitical tensions impacting supply chains and boosting exports. Despite 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, dairy exports grew by 13% in physical terms and 49% in monetary terms.

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. By 2025, 125 new dairy farms are expected to be built. The sector is exploring the resumption of full-scale dry milk exports to Japan. However, the industry faces challenges such as weakening domestic demand, falling commodity prices, and increased cheese imports. Ukraine is dealing with an oversupply of butter, affecting raw milk purchase prices and pushing dairy farms to operate at cost. Retail prices surged due to escalating production costs.

Partnerships and Future Prospects

Ukraine is partnering with Saudi Arabia in a $1 billion investment to boost agriculture and dairy production. The country is discussing a national "School Milk" program, potentially covering more than 4.4 million schoolchildren by 2026. The gap between raw milk prices and retail dairy product costs is widening, with farmers incurring losses due to declining purchase prices. Ukraine's dairy industry faces financial challenges due to export revenue decline and structural imbalances, with a shift from small-scale to industrial models. The dairy market is entering a phase of price decline amidst a growing surplus of raw milk.

The 'Dairy Module' Program

The 'Dairy Module' program covers nearly 75% of the cow population, aiming to enhance the traceability of milk quality and safety. As of January 1, 2026, the program has registered 1,295 market operators from 23 regions. The Union of Dairy Enterprises of Ukraine has urged a return to comprehensive food labeling standards to prevent product counterfeiting and consumer misinformation. Businesses located in frontline regions now have access to government support through initiatives like the 'Made in Ukraine' policy.

Logistics and Infrastructure Challenges

Ukraine’s dairy market is experiencing disruptions due to strikes damaging retail distribution centers and warehouses. Logistics disruptions have been exacerbated by attacks that damaged storage facilities and distribution infrastructure. Russian attacks have destroyed or damaged much of Ukraine’s modern warehouse capacity, disrupting the refrigerated logistics needed to move dairy products to retailers. Over 400,000 square meters of warehouse and logistics space have reportedly been destroyed or damaged since early July, severely affecting retail logistics. The war in Ukraine has affected energy, fertiliser and trade flows. Feed markets have been exposed to several disruptions, including pandemic-related problems and geopolitical tensions, with the war in Ukraine impacting energy, fertiliser, and trade.