An oversupply in the global dairy market, coupled with rising costs for energy, fuel, and fertilizers, is intensifying pressure on the profitability of dairy farms (MTFs) and may deter investments in production expansion in 2026. The decline in raw milk production in Ukraine is driven by falling yields in the household sector, while the dairy industry is gradually concentrating within the industrial segment.
According to preliminary data from the State Statistics Service, in February 2026, farms of all categories produced 397.6 thousand tonnes of raw milk, which is 23.6 thousand tonnes less (-5.6%) compared to January 2026 and 41.1 thousand tonnes less (-9.4%) compared to February 2025. In February 2026, the share of industrial enterprises in raw milk production was 63%, while households accounted for 37%.
Industrial enterprises produced 249.6 thousand tonnes of raw milk in February 2026, which is 20.3 thousand tonnes less (-7.5%) compared to January, but 10.4 thousand tonnes more (+4.3%) compared to February 2025.
Household farms saw yields of 148 thousand tonnes of milk in February 2026, which is 3.3 thousand tonnes less (-2.2%) compared to January and 51.5 thousand tonnes less (-25.8%) compared to February 2025.
According to the "Agricultural Market Forecast for Ukraine for 2026" report by the Ministry of Economy, Environment, and Agriculture, the decline in raw milk production is attributed to a further reduction in the cow population in households and limited access to electricity due to shelling, which increases milk processing costs. Overall, Ukraine's dairy sector is demonstrating a growing concentration of production in the industrial segment, while households are gradually exiting milk production. This trend underscores the need for further modernization and state support to stabilize and develop the industry.
An unforeseen increase in raw milk production in the second half of 2025 across the USA, Oceania, South America, and Europe led to a global oversupply of commodities, including butter, which has proven difficult to sell and is putting downward pressure on prices. This, in turn, has led to a collapse in procurement prices for milk, which as of March 1 remain below the cost of production at dairy farms. In addition to low procurement prices, an extra burden on dairy farm owners has been the increase in production costs due to energy supply issues that worsened in the winter of 2026. Farmers are forced to spend more on self-generated electricity due to Russian attacks on energy infrastructure and prolonged power outages.
Rising fuel prices resulting from hostilities in the Middle East and disruptions in oil supplies through the Strait of Hormuz have increased transportation costs for delivering raw milk from farms to processing plants. Increased natural gas prices have led to a reduction in fertilizer production and higher costs for ammonium nitrate, urea, and UAN-32. This may lead to higher expenditures for farmers producing feed for cow nutrition. Under these crisis conditions, dairy farms may revise their investment plans for 2026, as increasing raw milk production is problematic due to rising costs, and a significant recovery in domestic demand for dairy products in the short term is unlikely.
To support dairy farms during this challenging period, the Association of Milk Producers (AVM) proposed that the Government of Ukraine introduce a one-time financial aid package of 8,000 UAH per cow, regardless of farm size. International funding is expected to be secured for this purpose. A similar mechanism has been in place since 2023 to support small farms with up to 100 cows. It is now proposed to extend this support to all commercial dairy farms. The issue was discussed during a roundtable meeting at the Agrarian Committee of the Verkhovna Rada, where Members of Parliament expressed support for the initiative.
The Government of Ukraine is expected to consider allocating 62 million EUR for this program, which would partially cover the costs of maintaining cows during the two-month dry period. Furthermore, the state plans to increase the total volume of support for livestock farming. Aid is expected to be directed not only toward farm construction compensation but also toward reimbursing the cost of purchasing heifers, in accordance with existing state programs.
In February 2026, raw milk production volumes increased at agricultural enterprises in 13 regions: Rivne (+29%), Lviv (+16%), Kharkiv (+16%), Ivano-Frankivsk (+15%), Ternopil (+14%), Volyn (+9%), Vinnytsia (+8%), Zhytomyr (+7%), Mykolaiv (+5%), Kyiv (+4%), Cherkasy (+4%), Chernihiv (+4%), and Khmelnytskyi (+3%).
In February 2026, approximately 55% of raw milk was produced by agricultural enterprises in the following regions:
- Poltava region — 76.40 thousand tonnes;
- Cherkasy region — 64.30 thousand tonnes;
- Khmelnytskyi region — 49.50 thousand tonnes;
- Vinnytsia region — 48.50 thousand tonnes;
- Chernihiv region — 47.30 thousand tonnes.
Regarding beef production, according to preliminary estimates from the State Statistics Service, cattle slaughter volumes at enterprises in January-February 2026 totaled 20.86 thousand tonnes, which is 1.16 thousand tonnes less (-5.3%) compared to the same period last year.
Press service of the Association of Milk Producers
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