Ukraine Faces Surplus in Butter Amid Declining Exports and Rising Imports

Butter prices have been in decline for three months, with ex-factory prices dropping from UAH 400 per kilogram in August to UAH 250 in early December. This price drop has also affected raw milk purchase prices, pushing dairy farms to operate at cost, with a risk of unprofitability for around 40% of producers.

In 2025, Ukrainian dairy farms saw a 7% increase in livestock and milk production, marking the first growth in years. However, compliance with European animal welfare standards by 2028 poses financial challenges, potentially leading to the closure of up to 25% of farms unable to meet these requirements.

Ukraine exports about 20% of its butter to countries including the EU, Moldova, and Kazakhstan. Falling global prices have led to reduced exports, while increased imports from the EU further saturate the domestic market.

Although the EU increased Ukraine's butter export quota from 3,000 to 7,000 tons, low global prices have prevented local processors from capitalizing on this opportunity. Additionally, production is further strained by power outages requiring costly generator use, yet dairy product prices in Ukraine are expected to remain stable or decrease in early 2026.