Ukraine’s Dairy Sector Can No Longer Reach Retail Markets
Ukraine’s dairy industry is facing a logistics disruption after attacks damaged storage facilities and distribution infrastructure. Agriculture minister Taras Vysotskyi said on August 28 that about 90% of the country’s modern storage facilities had been destroyed, severely affecting retail logistics.
According to the analytical department of Forbes Ukraine, more than 400,000 square metres of commercial warehouse and logistics space had been destroyed or damaged since the beginning of July. A Russian strike on August 5 destroyed ten storage facilities in the Kyiv region, covering about 100,000 square metres. Other attacks hit logistics centres used by major retail chains and food companies.
Some processors have tried to bypass damaged distribution centres by sending larger quantities of dairy products directly to supermarkets. Elena Zupynas, deputy director-general of the Ukrainian Dairy Producers Association, said that shops cannot absorb those volumes. “The stores’ refrigerators were not designed to handle such quantities of dairy products,” she told the Ukrainian outlet UNIAN. Shops can add only a few bottles to their shelves and are not equipped to sell large volumes through that route. Dairy products also require compliance with temperature requirements, particularly during the summer.
The sector depends on refrigerated storage and continuous temperature control from processing plants to retail shelves. Zupynas said the disruption would require dairy companies to shorten their supply chains and rely more heavily on regional suppliers. Producers located near major consumer centres could therefore retain access to retail channels, while products from more distant areas could temporarily disappear from shelves.
The logistics problem has coincided with financial pressure on producers. Zupynas said Ukrainian dairy farmers had been operating at a loss for at least six months, with many covering those losses through profits from grain production. Damage to port infrastructure has disrupted agricultural exports, removing that source of support. She described Ukrainian dairy producers as being in “a very difficult situation” and compared the disruption with the mid-1990s, after independence, when the country’s sales and supply chains were dismantled.
Zupynas also said that the links between agricultural industries could transmit the crisis beyond dairy. “We remember the decline of the agricultural sector, when fields were neither sown nor cultivated. Unfortunately, we may face the same situation in 2027,” she said.
