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Raw milk prices in Ukraine continue to decline due to increased milk yields in household farms and the emergence of production surpluses on dairy farms. However, the situation may change with the onset of summer heat and an increase in Ukraine's export volumes of commodity products.

This is reported by Georgii Kukhaleishvili, an analyst at the Association of Milk Producers of Ukraine (AMP).

As of May 5, the average purchase price for extra-grade milk was 13.73 UAH/kg excluding VAT, which is 39 kopecks less than a month ago. The price range for this grade in farms varies from 13.40 to 14.20 UAH/kg excluding VAT. The upper limit of the price range decreased by 60 kopecks, and the lower limit decreased by 10 kopecks over the past month.

First-grade milk averages 13.73 UAH/kg excluding VAT (-39 kopecks). Prices for first-grade milk range from 13.40 to 14.20 UAH/kg excluding VAT. Compared to the second half of April, the lower limit of the price range decreased by 10 kopecks, and the upper limit decreased by 60 kopecks.

The average price for second-grade milk was 13.05 UAH/kg excluding VAT, which is 37 kopecks less compared to the second half of April. The minimum price in farms was 12.65 UAH/kg, and the maximum price was 13.40 UAH/kg. Over the past month, the lower limit of the price range decreased by 10 kopecks, and the upper limit decreased by 70 kopecks.

Consequently, the average weighted price for the three grades was 13.50 UAH/kg excluding VAT, which is 38 kopecks less than a month ago.

Georgii Kukhaleishvili notes that significant surpluses of raw milk continue to pressure purchase prices in Ukraine. "Since mid-April, household farms have seen an increase in milk yields due to warm weather. Milk production is also growing on dairy farms. In these conditions, dairy processing companies purchase certain volumes of raw milk from household farms because it is cheaper than from dairy farms and use it to produce dry milk and casein. As a result, dairy farms are experiencing a drop in raw milk prices, especially for large batches. The decrease in purchase prices for raw milk improves the profitability of commodity production in Ukraine", the expert emphasizes.

The recovery of consumption and prices for dairy products globally creates favorable conditions for increasing Ukraine's export of commodity products. In particular, raw milk in Ukraine is 25% cheaper than in the EU. However, the increase in cheese imports affects the consumption of domestic products in the domestic market, which in turn also restrains the growth of raw milk prices. Cheese production requires significant volumes of milk, and the reduction in demand from cheese producers leads to the emergence of milk surpluses on the market, which pressures prices. It is likely that at the beginning of June, there will be another reduction in raw milk prices at those farms where it costs more than 14 UAH/kg excluding VAT. However, from the second half of July, raw milk prices in Ukraine are likely to strengthen due to summer heat. Purchase prices may align with European ones if Ukrainian exporters increase their supply of commodity products to foreign markets.

Press service of the Association of Milk Producers

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