Milk Production in Russia Increases Due to Productivity Despite Declining Herd Numbers

According to industry experts, the dynamics of production in Russia remain unstable. Despite a positive result at the beginning of the year, zero growth is expected in the commercial milk segment by the end of 2026, indicating actual stagnation after a period of previously recorded growth.

"Only the Belarusians remain serious players in our domestic market. We are currently seeing surpluses in certain categories: the market is recovering, but Belarusian producers are capturing it more actively, while Russian producers are losing market share," said the CEO of Soyuzmoloko, Artem Belov.

Deputy Minister of Agriculture Maxim Borovoy continued the topic of partnership with Belarusian colleagues: "By the end of the first quarter, we evaluated the fulfillment of agreements recorded in the forecast balance. The overage averaged 14% in terms of milk. The main share is butter. Colleagues are restoring lost positions from 2025."

"It's not certain that government support will increase; let's hope it remains at least. Therefore, apart from finding internal resources to ensure stability and financial sustainability, there are no other options," added the Deputy Minister.

The demand for dairy products is showing limited recovery. While in 2025 consumption decreased by approximately 1%, in the first quarter of 2026, the market reached zero growth. By the end of the year, a 1–2% growth is forecasted, which at best will allow returning to 2024 levels.

"The consumer is changing significantly. In Moscow, cheese consumption per month is outpacing milk. 85% of consumers have consumed cheese in the last month," commented Ekaterina Khokhlova, marketing manager of the company "Packaging Systems".

The price situation on the Russian market remains tense. The pressure on prices is formed by accumulated stocks of dairy products, which exceed the average values of the last five years by about 40%. Meanwhile, market participants note a decrease in raw material prices in the spring months, which may indicate reaching a local price bottom.

An additional influencing factor remains the market structure. Russian producers face increased competition from Belarusian suppliers, who are actively expanding their presence and capturing market share in several product categories.

Among the key risks for the industry in 2026, experts highlight veterinary safety and changes in the state support system. Potential epizootic threats could significantly impact regional markets and production indicators, while subsidy restrictions increase the economic burden on farms.

"On one hand, retail is growing. But how long will this trend last? The first quarter — yes, but what about the second and third quarters? Population growth is exhausted, real disposable incomes are falling, many enterprises, especially state-owned ones, are moving to layoffs. What will this lead to? Big question. For now, we are growing because prices are rising slower than in other categories — we are deflators. Last year, we fell due to a 20% price increase in the fourth quarter of 2024 and early 2025. Now, butter in retail is in the negative, cheeses are in the negative. What will happen next? The HoReCa segment is facing very high risks. Will we be able to return to demand recovery this year? Big question," said Artem Belov.