Ukraine’s dairy sector faces potential losses of $27 million in 2024, attributed to high raw milk costs, reduced consumer demand, and unfavorable export prices. The Union of Dairy Enterprises of Ukraine (UDEU) is advocating for long-term contracts with milk producers to stabilize the market and ensure sustainability.
Ukraine’s dairy sector is facing significant financial challenges, with the Union of Dairy Enterprises of Ukraine (UDEU) forecasting potential losses of approximately $27 million in 2024. This grim prediction highlights the ongoing struggles faced by the country’s dairy processors, primarily driven by several key factors.
According to UDEU, the main contributors to these anticipated losses are the sharp rise in the cost of raw milk, which has been a persistent issue for several months, and the decline in consumer purchasing power, which has led to reduced demand for dairy products. Additionally, unfavorable prices for major export products, such as butter and milk powder, have rendered Ukraine’s dairy exports untenable.
In 2024, the average price of raw milk in Ukraine rose to $42.45 per 100 kg, a 20% increase compared to 2023. However, despite the rise in price, there has been a notable decline in milk purchase prices in January 2025. This is attributed to an excess supply of raw milk, decreased demand from processing enterprises, and lower consumption of fermented milk products.
UDEU experts have called for new agreements between milk producers and processors, similar to long-term contracts used in European Union countries. These agreements would aim to stabilize the market and ensure a sustainable future for Ukraine’s domestic dairy sector. The industry is hopeful that such measures will foster predictability and help mitigate the financial challenges faced by Ukrainian dairy processors.
The forecasted losses come at a time when the global dairy market is grappling with several economic uncertainties, making it more challenging for Ukrainian dairy producers to remain competitive both locally and in international markets. Despite these challenges, UDEU remains optimistic about the potential for restructuring and adapting to new market dynamics in order to secure a more stable and sustainable future for Ukraine’s dairy industry.
