Ukraine: Dairy Farms Increase Milk Production Volumes in January 2024
Source: The DairyNews
In January 2024, the industrial sector saw an increase in milk production volumes. However, there are several factors posing unwelcome risks for Ukrainian farmers, reports analyst Georgiy Kukhaleyshvili of the Association of Milk Producers.
According to State Statistics, in January 2024, farms of all categories produced 456,000 tons of raw milk, a 29% decrease compared to December 2023. January milk production volumes are nearly equivalent to those of the same period last year, with Ukraine producing only 0.3% less milk in January 2024 compared to January 2023. Over the analyzed period, industrial sector enterprises accounted for 38% of raw milk production, while household farms contributed 62%.
A total of 243,000 tons of raw milk were produced by agricultural enterprises in January, a 4% increase compared to December 2023 and a 6% increase compared to January of the previous year. However, household farms faced challenges, producing 213,000 tons of milk, a 67% decrease compared to December and an 8% decrease compared to January 2023.
It is noteworthy that 88% of the milk going for processing is produced by the industrial sector, so the reduction in milk production by household farms has a limited impact on the overall production of dairy products. Ukraine is gradually transitioning its food processing to exclusively use extra-grade raw materials, which can only be produced by dairy farms. According to the Ministry of Agrarian Policy order dated March 12, 2019, after the end of the martial law, milk processing enterprises will only be able to use extra-grade milk that meets European quality standards.
Georgiy Kukhaleyshvili observes that the industrial sector is struggling to compensate for the rapid reduction in milk production by household farms, which have been most significantly affected by the consequences of the war. Milk production in Ukraine is becoming more expensive due to increased fuel and electricity costs, higher feed production costs, more expensive premixes, and other purchasing ingredients. Small farms are unable to increase production costs, making dairy farms with more than 400 cows the most profitable and resilient to challenges.
If there is a ban on the import of dairy products from Poland in response to the losses of Ukrainian exporters from provocations by Polish farmers at the state border, competition among processors for additional volumes of raw milk may intensify in Ukraine. Excluding the impact of force majeure and seasonal factors, Ukraine produces enough milk to meet domestic market needs but not enough for export.
Several factors hinder the increase in milk production volumes. Over the past two years of Russia's full-scale invasion, the rate of cow reduction in household farms has accelerated, the feeding conditions of animals have worsened due to contamination of pastures and fields with mines and shells. The 14% increase in cattle prices compared to December 2023 provides grounds for increased cattle sales, potentially leading to further reductions in livestock. Dairy farmers face a lack of working capital, state subsidies, and, therefore, this scenario is quite likely. The unresolved issue remains the upgrading of the infrastructure of dairy farms. Most farm buildings were constructed during the Soviet era and no longer meet modern conditions.
In January 2024, an increase in raw milk production volumes was observed in farms of all categories in the following regions: Kyiv Oblast (+1.4%), Cherkasy Oblast (+2%), Khmelnytskyi Oblast (+4.3%), Chernihiv Oblast (+7.5%), Rivne Oblast (+1%), Poltava Oblast (+1%), Kharkiv Oblast (+5%), and Ternopil Oblast (+5%). An increase in milk production volumes in Ukraine is expected in the spring, during the large milk season when cows have higher lactation. Seasonal growth in milk production may temporarily mitigate the negative impact of the mentioned factors on the dairy industry.
In January 2024, about 50% of raw milk was produced in the following regions:
Poltava Oblast - 50.3 thousand tons;
Khmelnytskyi Oblast - 42.3 thousand tons;
Vinnytsia Oblast - 41.5 thousand tons;
Cherkasy Oblast - 36.2 thousand tons;
Chernihiv Oblast - 29.5 thousand tons;
Zhytomyr Oblast - 28 thousand tons.
As for beef production, according to estimates by State Statistics, in January 2024, the slaughter volumes of cattle in farms of all categories amounted to 13.9 thousand tons, which is 105.1 thousand tons less compared to December 2023. Compared to January 2023, slaughter volumes decreased by 9.4%. Enterprises produced 47% of beef from the total slaughter volume, and household farms produced 53%.
Slaughter volumes of cattle in enterprises in January amounted to 6.5 thousand tons, which is 27.7 thousand tons less compared to December. Beef production decreased by 9% compared to January 2023. In household farms, slaughter volumes of cattle in January 2024 amounted to 7.4 thousand tons, decreasing by 77.4 thousand tons compared to December 2023. Compared to January 2023, cattle slaughter volumes decreased by 9.5%.
The total slaughter volumes of farm animals, not only cattle but also pigs, sheep, and poultry, in January 2024 amounted to 279.1 thousand tons, which is 0.5% more compared to the same period last year. In January 2024, 60% of meat in Ukraine was produced in farms of all categories in the following regions:
Vinnytsia Oblast - 54.7 thousand tons;
Cherkasy Oblast - 40.2 thousand tons;
Dnipropetrovsk Oblast - 33 thousand tons;
Kyiv Oblast - 21.8 thousand tons;
Lviv Oblast - 16.5 thousand tons.
According to State Statistics, the highest growth in the sales volumes of live animals for slaughter occurred in Dnipropetrovsk Oblast (+7%), Kirovohrad Oblast (+7%), Rivne Oblast (+7%), Cherkasy Oblast (+6%), and Kharkiv Oblast (+5%).
A total of 243,000 tons of raw milk were produced by agricultural enterprises in January, a 4% increase compared to December 2023 and a 6% increase compared to January of the previous year. However, household farms faced challenges, producing 213,000 tons of milk, a 67% decrease compared to December and an 8% decrease compared to January 2023.
It is noteworthy that 88% of the milk going for processing is produced by the industrial sector, so the reduction in milk production by household farms has a limited impact on the overall production of dairy products. Ukraine is gradually transitioning its food processing to exclusively use extra-grade raw materials, which can only be produced by dairy farms. According to the Ministry of Agrarian Policy order dated March 12, 2019, after the end of the martial law, milk processing enterprises will only be able to use extra-grade milk that meets European quality standards.
Georgiy Kukhaleyshvili observes that the industrial sector is struggling to compensate for the rapid reduction in milk production by household farms, which have been most significantly affected by the consequences of the war. Milk production in Ukraine is becoming more expensive due to increased fuel and electricity costs, higher feed production costs, more expensive premixes, and other purchasing ingredients. Small farms are unable to increase production costs, making dairy farms with more than 400 cows the most profitable and resilient to challenges.
If there is a ban on the import of dairy products from Poland in response to the losses of Ukrainian exporters from provocations by Polish farmers at the state border, competition among processors for additional volumes of raw milk may intensify in Ukraine. Excluding the impact of force majeure and seasonal factors, Ukraine produces enough milk to meet domestic market needs but not enough for export.
Several factors hinder the increase in milk production volumes. Over the past two years of Russia's full-scale invasion, the rate of cow reduction in household farms has accelerated, the feeding conditions of animals have worsened due to contamination of pastures and fields with mines and shells. The 14% increase in cattle prices compared to December 2023 provides grounds for increased cattle sales, potentially leading to further reductions in livestock. Dairy farmers face a lack of working capital, state subsidies, and, therefore, this scenario is quite likely. The unresolved issue remains the upgrading of the infrastructure of dairy farms. Most farm buildings were constructed during the Soviet era and no longer meet modern conditions.
In January 2024, an increase in raw milk production volumes was observed in farms of all categories in the following regions: Kyiv Oblast (+1.4%), Cherkasy Oblast (+2%), Khmelnytskyi Oblast (+4.3%), Chernihiv Oblast (+7.5%), Rivne Oblast (+1%), Poltava Oblast (+1%), Kharkiv Oblast (+5%), and Ternopil Oblast (+5%). An increase in milk production volumes in Ukraine is expected in the spring, during the large milk season when cows have higher lactation. Seasonal growth in milk production may temporarily mitigate the negative impact of the mentioned factors on the dairy industry.
In January 2024, about 50% of raw milk was produced in the following regions:
Poltava Oblast - 50.3 thousand tons;
Khmelnytskyi Oblast - 42.3 thousand tons;
Vinnytsia Oblast - 41.5 thousand tons;
Cherkasy Oblast - 36.2 thousand tons;
Chernihiv Oblast - 29.5 thousand tons;
Zhytomyr Oblast - 28 thousand tons.
As for beef production, according to estimates by State Statistics, in January 2024, the slaughter volumes of cattle in farms of all categories amounted to 13.9 thousand tons, which is 105.1 thousand tons less compared to December 2023. Compared to January 2023, slaughter volumes decreased by 9.4%. Enterprises produced 47% of beef from the total slaughter volume, and household farms produced 53%.
Slaughter volumes of cattle in enterprises in January amounted to 6.5 thousand tons, which is 27.7 thousand tons less compared to December. Beef production decreased by 9% compared to January 2023. In household farms, slaughter volumes of cattle in January 2024 amounted to 7.4 thousand tons, decreasing by 77.4 thousand tons compared to December 2023. Compared to January 2023, cattle slaughter volumes decreased by 9.5%.
The total slaughter volumes of farm animals, not only cattle but also pigs, sheep, and poultry, in January 2024 amounted to 279.1 thousand tons, which is 0.5% more compared to the same period last year. In January 2024, 60% of meat in Ukraine was produced in farms of all categories in the following regions:
Vinnytsia Oblast - 54.7 thousand tons;
Cherkasy Oblast - 40.2 thousand tons;
Dnipropetrovsk Oblast - 33 thousand tons;
Kyiv Oblast - 21.8 thousand tons;
Lviv Oblast - 16.5 thousand tons.
According to State Statistics, the highest growth in the sales volumes of live animals for slaughter occurred in Dnipropetrovsk Oblast (+7%), Kirovohrad Oblast (+7%), Rivne Oblast (+7%), Cherkasy Oblast (+6%), and Kharkiv Oblast (+5%).
