Raw milk prices in Ukraine are supported by export demand, rising global prices for butter and milk powder, and shrinking raw milk supply in producer regions. At the same time, domestic demand, logistics, and finished product sales will remain the main factors that could restrain further growth in procurement prices.
As of September 20, the average procurement price for extra grade milk stood at UAH 15.60/kg excl. VAT, which is UAH 0.60 more than a month ago. The price range for this grade on farms varies from UAH 14.80 to UAH 16.00/kg excl. VAT. The lower limit of the price range grew by UAH 0.40, and the upper limit by UAH 0.50 over the last month.
Higher grade on average costs UAH 15.40/kg excl. VAT, which is UAH 0.65 more expensive than in the second half of the previous month. Higher grade milk prices range from UAH 14.60 to UAH 15.70/kg excl. VAT. The lower limit of the price range increased by UAH 0.40, and the upper limit grew by UAH 0.50 over the last month.
The average price for first grade milk stood at UAH 14.70/kg excl. VAT, which is UAH 0.90 higher relative to the previous month. The minimum price on farms stood at UAH 14.00/kg, and the maximum price stood at UAH 15.00/kg. The lower limit of the price range grew by UAH 0.80, and the upper limit increased by UAH 1.00 over the last month.
Accordingly, the weighted average price of the three grades stood at UAH 15.40/kg excl. VAT. Relative to the previous month, the average price increased by UAH 0.65. Compared to September 2025, the price is UAH 1.52 lower (-10%).
In the second half of September, procurement prices in Ukraine increased amid fairly high demand for raw milk from milk processing enterprises at the end of the month. First, the intensification of raw milk demand in Ukraine was facilitated by growing demand for exchange-traded commodities in export markets. About 63% of EU butter production is accounted for by Germany, France, Italy, and Poland. In these countries, milk production is declining. According to Rabobank forecasts, in the fourth quarter, milk production in the EU may decrease by almost 2% year-on-year.
The shrinking milk supply in Europe is already supporting butter prices, which attracts traders' attention to Ukrainian products. A similar situation is observed in the milk powder market, where prices remain at high levels. Milk powder prices in the US exceed European ones, which creates additional opportunities for exporters and supports the global market for dairy components. Growing export demand improves the economics of butter and milk powder production in Ukraine and creates conditions for further increases in raw milk procurement prices.
Second, demand for raw milk exists among small enterprises that produce whole milk products for the domestic market. Due to the disruption of traditional logistics routes, their products are becoming more sought-after, especially in district centers and urban-type settlements. Retail chains are trying to cooperate more actively with local producers following Russian strikes on distribution centers. This, in turn, pushes up raw milk purchases on commercial dairy farms and affects price formation. Against this background, the forecast regarding the cost of large batches of extra grade milk is coming true.
Third, the intensification of El Niño phenomena creates weather risks for production in South America, New Zealand, and Australia. In New Zealand and Australia, drier weather is expected, which could degrade pasture conditions and feed availability. At the same time, heavy rainfall is forecast in South America, which could negatively impact feed quality and milk yields. In the event of reduced milk yields in certain regions of the world and the EU, this could support global prices for butter, milk powder, and raw milk.
It is expected that in September the price will remain in the range of UAH 15.50–16.00/kg, and in October it may rise to UAH 16.00–16.50/kg.
At the same time, price growth may be restrained by the situation on the domestic market. Russian drone and missile strikes on warehouse and distribution centers disrupt dairy product supplies, and milk processing enterprises are forced to compensate for part of the retail chains' losses. According to market participants' estimates, retail chains require processors to compensate for 50% to 100% of products lost due to shelling. Additional pressure is created by rising logistics costs. Due to infrastructure destruction, dairy products have to be delivered via longer routes directly to stores, which increases manufacturers' costs and may restrain increases in raw milk procurement prices.
One of the key long-term tasks for the Ukrainian dairy industry remains the development of deep processing. It is precisely the production of value-added products, particularly whey concentrates, lactoferrin, and other complex dairy ingredients, that can provide producers with additional margins and enhance the industry's competitiveness. Rising milk production costs and stricter requirements for producers are gradually bringing the Ukrainian market closer to European conditions. At the same time, Ukrainian producers currently receive about 30 euro cents per kg of milk, whereas in the EU the price can reach about 50 euro cents. Under such conditions, competing solely through raw milk production will become increasingly difficult, so the industry needs to increase the share of value-added products.
Press service of the Association of Milk Producers
Follow us on LinkedIn
Related News
Ukraine Increased Beef Exports Against the Background of Changes in the Global Market