Today, the AMP (Association of Milk Producers) Directorate received notification that certain milk processing plants, on the initiative of the Union of Dairy Enterprises of Ukraine (UDEU), have begun "testing" the reaction of farms to a reduction in the raw milk procurement price starting November 1st, 2025, from 17.2 to 16.50 UAH/kg, and in some places — even down to 15.8 UAH/kg (excluding VAT). Such actions are harmful, short-sighted, and destructive for the entire dairy industry of Ukraine.
Ukraine is entering a difficult period, November 2025 – September 2026, when a temporary dip in global fat demand puts pressure on butter and milk powder margins for processors. But a sharp reduction in raw milk prices is not an anti-crisis strategy—it is self-destruction.
What is Happening:
- Ukrainian milk processing is export-oriented: every 5th kilogram of milk delivered to plants goes into export dairy products. Given the unlikelihood of a significant increase in domestic dairy consumption amid the war and new waves of forced emigration, any further increase in raw milk supply in Ukraine must be supported by the ability to export it!
- Demand for dairy commodities (especially butter) is temporarily slumping globally in 2025–2026. However, by September 2026, according to USDA forecasts, the world will absorb the current surpluses, and the market will begin to recover. According to Research&Markets, the global butter market, after recovery, is projected to demonstrate an annual growth rate (CAGR) of 4.3% and will grow from $27.84 billion in 2024 to $40.81 billion in 2033.
- The updated Ukraine-EU trade agreement comes into effect on November 1, 2025, and a "surprise" awaits us here:
The duty on imported butter and cheese from the EU is halved—to 3%. Yes, the duty-free export quota for Ukrainian butter to the EU has been increased from 3 to 7 thousand tonnes—but this does not solve the problem: for the next six months, exporting there is unprofitable even without the duty.
- Important: A condition of the updated trade agreement is the full implementation of EU animal welfare requirements by 2028, which in dairy farming will require additional investments of at least 10 billion UAH from farms, posing an extra challenge for the survival of small and medium-sized farms in particular.
- Large retail chains in Ukraine are already contracting imports of cheap European butter and cheese for the New Year season — now with a duty that is half as low. However, no mechanism to protect domestic producers has been proposed.
Consequences of Short-Sighted Actions
Today, we are trying to "compete" with cheap EU butter, which may cost less than 80 UAH per pack, but tomorrow — we will be left without our own milk and will be forced to buy imported milk at 200+ UAH/pack.
The ill-conceived collapse of raw milk procurement prices will lead to:
- The folding of investment projects in livestock farming,
- The closure of small and medium-sized dairy farms,
- The loss of thousands of jobs in rural areas,
- Even greater dependence on imported dairy products.
This is a threat to Ukraine's dairy security.
The AMP's Position and Call to the UDEU
1. Prevent prices from collapsing below 16.7 UAH/kg (excluding VAT) until the end of 2025. This is the minimal survival threshold for most Ukrainian dairy farms. Any further reduction is a direct path to the collapse of the industry.
2. Parallel to lowering raw material prices, introduce promotions in retail chains: 20–30% discounts on butter and cheeses for the consumer.
You cannot only save money on the producer!
3. Stop manipulating farms' "super-profitability."
Ion Moraru, finally show us how exactly your "calculations" arrive at an average margin of 51% for productive farms? Based on which sample? From which real farms?
Such frankly pseudo-expert conclusions mislead processors and harm the entire industry.
According to AMP benchmarking data, in August 2025, at the highest milk prices this year, the average operational profit of farms was 13.3%, with most small and medium-sized farms having an average loss of -1.4%!
4. Finally establish honest dialogue between plants and farms; synchronize planning and forecasting!
5. Demand that the Ministry of Economy and the Cabinet of Ministers activate the "safeguard mechanism" within the agreement with the EU, which allows measures to be taken when imports from the other side threaten economic or social difficulties in Ukraine.
6. Work jointly with the State Service of Ukraine on Food Safety and Consumer Protection (SSUFSCP), customs, and law enforcement: Stop "grey imports" of dairy products, where "dealers" bring in cheeses and butter in vans from Polish discount chains—this is a real threat to the legal market and the Ukrainian consumer.
Association of Milk Producers of Ukraine
Follow us on LinkedIn
Related News