Surplus of Raw Materials Increases Price Pressure: Milk Prices Drop in Ukraine

Ukraine 29.12.2025

The dairy market in Ukraine is entering a phase of price decline amidst a growing surplus of raw milk. Increased production combined with reduced domestic consumption—partly due to population migration—leads to an oversupply that was previously partially absorbed by exports. However, in the current conditions, global dairy markets also remain oversaturated, according to the Association of Milk Producers, citing industry monitoring data.

Surplus of Raw Materials Increases Price Pressure: Milk Prices Drop in Ukraine

According to the association's analyst, Georgiy Kukhaleyshvili, in November 2025, Ukraine produced 35,000 tons more raw milk than the previous year. "These volumes were supposed to be exported as finished products. However, the external markets are still in crisis: the supply of dairy products exceeds demand," he noted.

The price dynamics confirm the growing imbalance. As of December 20, the average purchase price of three grades of milk was 15.20 UAH per kg (excluding VAT), which is 1.05 UAH below the previous month's level.
In terms of categories:

Extra-grade milk was sold at an average of 15.30 UAH/kg with a range of 14.80–16.00 UAH/kg;
First-grade milk was priced at 15.20 UAH/kg (14.70–15.80 UAH/kg);
Second-grade milk stood at 14.80 UAH/kg, with minimum prices dropping to 14.00 UAH/kg.

Experts note that Ukraine is no exception: similar processes are observed in the USA and European countries. The oversupply of dairy commodities has led to a situation where, even with relatively cheap raw materials, the production of butter and powdered milk remains unprofitable. The global market is unable to quickly "digest" the accumulated product volumes.

Additional pressure on prices, according to AMP forecasts, may arise as early as January 1, 2026. During the New Year holidays, business activity traditionally declines, resulting in additional surpluses of raw milk at processing enterprises.

"The stabilization of the situation and the restoration of balance between supply and demand are expected no earlier than the end of the third quarter of 2026," emphasized Georgiy Kukhaleyshvili. Until then, market participants will have to adapt to conditions of low purchase prices.

Meanwhile, foreign trade remains one of the few supporting factors for the industry. In the first 11 months of 2025, Ukraine exported dairy products worth $375.43 million, 35% more than in the same period last year. The main driver of export growth in November was condensed dairy products.