Throughout May, raw milk prices in Ukraine remained stable, despite a surplus of supply, which was offset by exports of finished products to the EU. However, the likely resumption of quotas and tariffs by the European Commission in June, the increase in cheese imports to Ukraine, and the risk of foot-and-mouth disease spread pose a threat to price stability in the domestic market, according to Georghii Kukhaleishvili, an analyst at the Association of Milk Producers.
As of May 22, the average purchase price of extra grade milk was UAH 16.12/kg excluding VAT, which is UAH 0.03 less than a month ago. The price range for this grade on farms varies from UAH 15.50 to UAH 16.50/kg excluding VAT. The lower and upper limits of the price range remained unchanged.
Higher grade milk costs an average of UAH 15.93/kg excluding VAT (-UAH 0.02). Prices for higher grade milk fluctuate from UAH 15.30 to UAH 16.20/kg excluding VAT. Compared to the monitoring results of the second half of last month, the lower and upper limits of the price range did not change.
The average price of first grade milk was UAH 15.60/kg excluding VAT and remained unchanged compared to the second half of last month. The minimum price on farms was UAH 15.00/kg and did not change over the last month. The maximum price was UAH 15.80/kg and remained unchanged.
Accordingly, the average weighted price of the three grades was UAH 15.97/kg excluding VAT, which is UAH 0.03 less compared to the previous period.
Georghii Kukhaleishvili notes that raw milk prices have hardly changed over the past month, as the situation in Ukraine's dairy market remained stable in May. There are some surpluses of raw milk in the market. Demand for exchange-traded goods was fully covered by the existing supply. Dairy processing enterprises were likely willing to sell even more dairy products due to the uncertainty surrounding the autonomous trade measures (ATMs) for milk and dairy products from Ukraine, which since 2022 have allowed domestic processing enterprises to supply their products to the EU without quotas and duties. European traders bought Ukrainian dairy products in the quantities they needed, taking advantage of the fact that butter and skimmed milk powder in Ukraine are cheaper than in Europe.
However, under pressure from farmers and politicians from Poland and France, the European Commission plans to reinstate tariffs and quotas on Ukrainian agricultural products from June 6, which may lead to a reduction in exports of dairy products from Ukraine to the EU and a gradual decrease in purchase prices. If the EU does not extend the benefits to exchange-traded goods from Ukraine, then domestic exporters of butter, skimmed milk powder, and condensed milk are unlikely to fit within the quotas, beyond which a 25% tariff on finished products will apply.
For example, the annual quota for skimmed milk powder for Ukraine is 5 thousand tonnes, while in 2024 our companies exported 14.91 thousand tonnes of skimmed milk powder to the EU, and in the first four months of 2025 – already 4.33 thousand tonnes. Imports of skimmed milk powder from Ukraine have been increased by Romania and Bulgaria, which reduced their raw milk production after joining the EU. Likely, a decrease in the price of skimmed milk powder, which is a by-product of butter production, may put pressure on raw milk prices in Ukraine.
Purchase prices are pressured by the increased supply and consumption of imported cheeses in the domestic market, the share of which has reached 47%. Limiting the import of Polish cheeses to Ukraine and increasing the cashback by 30% for buyers of domestically produced cheeses could stabilize raw milk prices. However, the implementation of these measures is unlikely due to the position of the Ministry of Economy and the reluctance to worsen relations with Poland, which is considered a strategic partner of Ukraine in the military sphere.
The outbreak of foot-and-mouth disease in Central and Eastern Europe remains a threat to the Ukrainian dairy industry. Since the beginning of the year, the spread of the infection has been recorded on 12 farms in Hungary, Slovakia, and Germany, and 26.7 thousand animals have been destroyed. If the infection enters Ukraine, then a significant decrease in raw milk prices is highly likely in the market due to the introduction of quarantine and a ban on the export of finished products. It is crucial to implement biological safety measures on dairy farms to avoid the spread of infection.
A sharp drop in raw milk prices is unlikely in the short term, as Ukrainian exporters will have enough duty-free quotas in the EU market for June. In addition, the peak volumes of raw milk production in Ukraine passed in May. From June, a decrease in milk yield is expected under the influence of rising air temperatures and reduced lactation in cows, which should contribute to price stabilization. A sharp increase in butter prices in the EU at the end of the year could restrain the fall in raw milk prices in Ukraine. Ukrainian butter is of interest to European traders because its price is lower than that of locally produced goods.
Press Service of the Association of Milk Producers
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