Challenges and Opportunities in Ukraine's Dairy Industry

In February 2025, Ukrainian farms produced a total of 439,000 tonnes of raw milk, marking a decrease of 14,000 tonnes (-3%) from January 2025 and 24,000 tonnes (-5%) compared to February 2024, according to the Association of Milk Producers (AMP). For the period of January to February 2025, total milk production totaled 891,000 tonnes, a reduction of 32,000 tonnes (-4%) from the same time frame the previous year.

Dairy enterprises were responsible for 55% of the raw milk output in February 2025, producing 239,000 tonnes, representing a decrease of 20,000 tonnes (-8%) from January 2025 but also an increase of 4,000 tonnes (+2%) compared to February 2024. Industrial dairy farms demonstrated resilience by producing 499,000 tonnes in the first two months of 2025, an increase of 21,000 tonnes (+4%) over the last year.

Contrastingly, household farms produced 200,000 tonnes in February 2025, which is an uptick of 6,000 tonnes (+3%) from the prior month, although this remains 28,000 tonnes (-12%) lower than February 2024. Cumulatively, small-scale farmers contributed 393,000 tonnes over the first two months, declining by 53,000 tonnes (-12%) year-on-year.

AMP analyst Heorhiy Kukhaleishvili indicated that further expansion in industrial dairy will likely be constrained by weakening domestic dairy product demand and falling procurement prices. The challenge is exacerbated by recent reports of foot-and-mouth disease threats in neighboring Hungary and Slovakia, potentially affecting livestock numbers.

Despite the hurdles, there is room for a cautious optimism. Efforts to revive milk demand through retail incentives are underway. The onset of spring ushers in the ice cream season and an increase in exports of canned dairy goods, potentially boosting processing activities.