Purchase prices continued to decline in the second half of February due to reduced demand for dairy products in the domestic market and unprofitable production of the skimmed milk powder/butter pair, according to Georgii Kukhaleyshvili, an analyst at the Association of Milk Producers of Ukraine (AMP).
The average purchase price for extra grade milk as of February 24 was 16.80 UAH/kg excluding VAT, which is 60 kopecks less than a month ago. The price range for this grade at farms varies from 16.50 to 17.00 UAH/kg excluding VAT. The lower price range decreased by 1.00 UAH, while the upper range fell by 1.70 UAH over the past month.
Higher grade milk averages 16.65 UAH/kg excluding VAT, 30 kopecks less compared to last month. Prices for higher grade milk range from 16.00 to 16.80 UAH/kg excluding VAT. Compared to the results of the monitoring in the second half of last month, the lower price range decreased by 1.20 UAH, and the upper range by 1.40 UAH.
The average price for first grade milk was 16.00 UAH/kg excluding VAT, decreasing by 40 kopecks compared to the second half of last month. The minimum price at farms was 15.20 UAH/kg, 1.30 UAH less than the previous month. The maximum price was 16.20 UAH/kg, which fell by 90 kopecks.
As a result, the average weighted price for the three grades was 16.60 UAH/kg excluding VAT, 48 kopecks lower than a month ago.
Georgii Kukhaleyshvili noted that purchase prices in Ukraine continued to decline in the second half of February, considering that the production of skimmed milk powder/butter pair is currently unprofitable. Skimmed milk powder and butter are key export dairy products. The decline in raw milk prices in Ukraine is likely influenced by the reduced purchasing power of Ukrainians and decreased consumption of dairy products in the domestic market. Ukrainian consumers were unprepared for the sharp rise in dairy product prices in retail networks at the end of 2024. Purchase prices are pressured by low demand from milk processing enterprises and surplus raw milk in Ukraine.
It is likely that on March 1, the last decrease in the average purchase price to 16.40-15.50 UAH/kg excluding VAT is expected, but the market situation may change in the second half of the month. Promotional discounts on dairy products in retail networks are expected in March, which may stimulate demand for raw milk from milk processing enterprises in the domestic market. If dairy product sales increase, further declines in raw milk prices in the second half of March are unlikely and may resume from May 1.
The prospects for further changes in purchase prices will depend on the possibility of extending the EU’s preferential tariff regime for Ukrainian dairy exporters, which was introduced in 2022 following the full-scale Russian invasion of Ukraine. If there is a return to the 2016 regime, when duty-free dairy product supplies to the EU applied only to volumes within quotas, it could reduce export volumes, increase raw milk surpluses in the domestic market, and weaken purchase prices. Approximately 30-35% of raw milk processed in Ukraine is further exported as finished products.
From June 2025, an increase in raw milk production volumes is expected in Ukraine due to the launch of new dairy farms in Western Ukraine, which were under construction in 2023-2024. Most likely, the increase in raw milk supply in the market under conditions of limited demand will put pressure on prices. However, the emergence of additional raw milk volumes could be offset by the launch of the Hadyachsyr enterprise in Q4 2025, which was purchased by PJSC “Ichnyansky Milk-Canning Plant.” For production at such a powerful enterprise to be non-loss-making, processing volumes must be at least 300 tons of raw milk per day.
According to the AMP monitoring results, in February 2025, the average price for young bulls was 80.00 UAH/kg including VAT, for cows below average weight – 73.00 UAH/kg excluding VAT, for cows of average weight – 72.00 UAH/kg excluding VAT, and for cows of higher weight – 70.00 UAH/kg excluding VAT.
Press Service of the Association of Milk Producers
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