In the second half of January, raw milk prices in Ukraine decreased across all grades due to a surplus of dairy products and a reduction in exports, despite rising production costs at dairy farms. The situation is significantly complicated by the energy crisis, which disrupts the operation of farms and dairy processing plants; therefore, the industry requires anti-crisis solutions, state support, and the ensurance of a stable energy supply, reports Georghii Kuhiashvili, analyst at the Association of Milk Producers.
The average procurement price for Extra grade milk as of January 20 was 14.50 UAH/kg (excluding VAT), which is 80 kopecks less than the previous month. The price range for this grade on farms varies from 13.50 to 14.90 UAH/kg (excluding VAT). The lower limit of the price range decreased by 1.30 UAH, and the upper limit by 1.10 UAH.
Higher grade milk costs an average of 14.30 UAH/kg (excluding VAT), down 90 kopecks compared to the previous month. Prices for high-grade milk fluctuate from 13.50 to 14.50 UAH/kg (excluding VAT). The lower limit of the price range decreased by 1.20 UAH, and the upper limit by 1.30 UAH.
The average price for First grade milk was 13.90 UAH/kg (excluding VAT), a decrease of 90 kopecks compared to the previous month. The minimum price on farms was 13.00 UAH/kg, which is 1.00 UAH less than the previous month. The maximum price was 14.00 UAH/kg, also down 1.00 UAH relative to the previous month.
Accordingly, the weighted average price of the three grades was 14.35 UAH/kg (excluding VAT), which is 85 kopecks less than the previous month.
Georghii Kuhiashvili notes that the second half of January saw another drop in raw milk prices across all grades. Milk from households is also becoming cheaper. Compared to January 2025, the average price of milk has decreased by 20%. An unpredicted increase in yields in Europe, the USA, Oceania, and South America in the second half of 2025 and the appearance of an oversupply of dairy products on the global market led to a crash in export prices for commodities, including butter and milk powder. This, in turn, led to a reduction in exports and lower raw milk prices. Ukrainian dairy processors have been increasing the output of butter, condensed milk, and milk powder, which are becoming problematic to sell. The production of milk and butter remains low-profit. The situation presents a serious challenge for the dairy sector, as current procurement prices do not match the rising production costs at dairy farms.
A major challenge for the dairy industry is the lack of electricity caused by systematic shelling of Ukraine's energy infrastructure by Russian occupiers. Due to many hours of blackouts, there have been disruptions in the shipment of raw milk from dairy farms to processing plants. Factories report that they cannot accept milk for processing when the power is off. If the energy supply situation does not improve soon, milk producers must develop anti-crisis measures in case processors are unable to accept milk for 1-2 days.
It is advisable for dairy farms to review their investment plans for 2026, as a rapid increase in raw milk production is not timely under current energy crisis conditions, and a significant recovery in domestic demand for dairy products is unlikely in the short term. In Ukraine, the cost of raw milk production is rising due to additional expenses for diesel generators and independent power generation. Severe frosts have led to decreased cow productivity, falling yields, and logistical collapses.
Under the conditions of the energy crisis, dairy industry participants require state support, namely the cancellation of the excise tax on diesel fuel for generators, a reduction of the excise tax on diesel fuel for the needs of agricultural producers, and assistance in implementing alternative energy projects (solar power plants or biogas units). Domestic dairy sales should be improved by the Government’s support of Draft Law 6068-d on combating unfair trade practices of retail chains and the implementation of protective measures against significantly increasing dairy imports. Counteraction against "grey" dairy imports into Ukraine is also necessary. Food for humanitarian kits and other state purposes should be purchased exclusively from domestic producers.
It is likely that a gradual recovery in demand for commodities will occur at the beginning of the second quarter, and by the end of the third quarter, a stabilization of the global dairy market is probable. This is indicated by the price increases for main commodities in the 395th and 396th GDT auctions, as well as the strengthening of butter prices in the USA and Europe. The main challenge for the Ukrainian dairy industry remains ensuring energy resources at a level sufficient for operation for both dairy farms and processing facilities.
Press Service of the Association of Milk Producers
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