The key task for the Ukrainian dairy sector is to transition from exporting commodities to high-value-added products. Without investments in deep processing and modern technologies, Ukraine risks losing its competitive advantages and conceding its position to foreign suppliers, even within traditional markets.
According to preliminary data from the State Statistics Service of Ukraine (SSSU), in May 2026, 10.93 thousand tons of dairy products were exported, totaling 32.89 million USD. Export volumes in physical terms increased by 2%, and revenue grew by 5% compared to April 2026. Compared to May 2025, physical export volumes dropped by 27%, while revenue contracted by 35%. In January–May 2026, Ukraine exported 52.25 thousand tons (-10%) of dairy products valued at 145.81 million USD (-19%).
The main export categories were as follows:
- Condensed Milk and Cream – 31%
- Ice Cream – 26%
- Cheese – 18%
- Butter – 8%
- Casein – 6%
- Milk Whey – 6%
In May 2026, Ukraine increased its physical export volumes of condensed milk and cream to 3.64 thousand tons (+18%), cheese to 1.24 thousand tons (+6%), and ice cream to 2.24 thousand tons (+21%), but reduced shipments of other dairy products. Compared to May 2025, Ukraine boosted physical export volumes of fermented dairy products to 597 tons (+19%) and ice cream (+0.3%). Shipment volumes of other dairy commodities declined compared to the previous year's period.
In May 2026, Ukraine increased export revenue for shipped batches of condensed milk and cream to 10.2 million USD (+25%), cheese to 5.81 million USD (+7%), and ice cream to 8.39 million USD (+21%) compared to April 2026, but saw revenue declines across other positions. The sharpest drop over the past month was recorded in butter export revenue (-42%). Compared to May 2025, monetary revenue grew for fermented dairy products to 854 thousand USD (+25%), milk whey to 1.97 million USD (+24%), and ice cream (+4%).
The situation on the global dairy market remains complex. Due to export constraints, specifically the blockade of the Strait of Hormuz, Gulf countries have reduced their butter purchases. Consequently, butter is accumulating in the warehouses of both European and Ukrainian dairy processing enterprises. A significant number of Ukrainian companies are unwilling to sell their products at current low prices and are waiting for market conditions to improve. However, near-term prospects remain uncertain.
At the same time, the Skim Milk Powder (SMP) market looks considerably better. Demand for protein products remains consistently high. This concerns not only milk powder but also a wide spectrum of milk proteins, which are being increasingly utilized in the food industry. It is precisely the demand for proteins that supports the export capabilities of the dairy sector.
Moderate growth in demand for cheese, milk powder, and whey, alongside the stabilization and slight increase in butter demand, could help prices recover in the EU during the second half of 2026. Over the past 30 years, 4 million dairy farms have closed in the EU. By 2035, EU milk production could decrease by 10–15 million tons, which opens a window of opportunity for Ukrainian exporters.
Due to the war and diminished consumer purchasing power, the domestic market can no longer sustain the necessary growth rates. Therefore, every additional liter of milk produced in Ukraine must be directed toward foreign target markets. The Ukrainian dairy sector has already come a long way in integrating into the European market. If in 2014 Ukraine exported primarily industrial casein to the EU, today Ukrainian companies supply small batches of kefir, yogurts, and other higher-value-added products to the European market.
However, the export structure remains insufficiently efficient, as Ukraine predominantly exports milk powder and butter, which yield the lowest value-added. Global dairy leaders are increasingly pivoting toward manufacturing dairy ingredients (whey proteins, lactoferrin), which display the highest demand growth rates. By 2035, global demand for butter is expected to grow by approximately 30% and milk powder by 65%, whereas the demand for dairy ingredients is projected to more than triple.
A serious challenge for Ukrainian exporters comes from changes within the EU market. The EU has allowed duty-free imports of 100 thousand tons of milk powder annually from Latin American countries (Mercosur). For comparison, Ukraine's quota stands at just 15.4 thousand tons of milk powder. This intensifies competition and exerts additional pressure on baseline dairy commodity prices.
Trade relations are also shifting with China, which has expanded its raw milk production in recent years. Already, 68% of all farms in China consist of large operations with a herd size exceeding 1,000 cows. Today, China is betting on stabilizing milk production and further consolidating both farming operations and processing capacities. Chinese consumers are increasingly choosing high-protein, low-sugar products with additional health benefits. In the long run, milk consumption growth rates may remain limited due to declining birth rates and marriage numbers in China. This will most heavily impact the demand for infant formula, fermented dairy products, and yogurts.
The key strategic objective for the Ukrainian dairy sector is transitioning from commodity exports to high-value-added products. Without investments in deep processing and modern technologies, Ukraine risks losing its competitive advantages, scaling back production, and yielding ground to foreign suppliers even in traditional markets. Instead, expanding the production of protein ingredients, functional dairy products, and health-focused options could form the foundation for the long-term growth of Ukrainian dairy exports.
In May, Ukraine increased dairy product imports to 7.92 thousand tons, which is 41% more compared to April 2026 and 57% higher than in May 2025. In January–May 2026, Ukraine imported 30.49 thousand tons of dairy products valued at 145.35 million USD. Physical import volumes increased by 13% compared to the previous year's period. The share of cheese in total imports stands at 61%. The growing volume of cheese imports creates risks for Ukrainian cheesemakers under conditions of limited domestic market demand. Although Poland is building a defensive strategy against Ukrainian dairy products, Ukraine has nonetheless become one of the key sales destinations for Polish cheeses.
Imported cheeses restrain demand for domestic products and put downward pressure on farm-gate purchase prices. To improve domestic dairy sales, state protectionist measures are required against uncontrolled dairy imports from Europe, alongside countermeasures against unfair trading practices by retail chains. Revitalizing domestic market demand should also be supported by expanding state procurement of domestic dairy products, including for the needs of the Armed Forces of Ukraine.
The foreign trade balance in May 2026 was negative, standing at -1.17 million USD.
Press service of the Association of Milk Producers
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