Milk prices in Ukraine continue to trend downward as oversupply and export market challenges weigh heavily on the dairy sector. According to data from the Association of Milk Producers (AMP), the weighted average purchase price for all three milk grades fell to UAH 15.20 per kilogram (excluding VAT) in the second half of December.
The decline reflects persistent pressure from excess raw milk availability and subdued demand for finished dairy products, both domestically and internationally.
Price Movement Across Milk Grades
As of 20 December, the average purchase price for extra-grade milk dropped to UAH 15.30/kg, down UAH 1 from the previous month. Meanwhile, higher-grade milk averaged UAH 15.20/kg, marking a decline of UAH 0.90. Prices for first-grade milk fell even more sharply, decreasing by UAH 1.10 to UAH 14.80/kg.
Overall, the weighted average price across all grades declined by UAH 1.05 compared with the previous period, confirming a sustained downward trend.
Oversupply Pressures the Market
The price correction is largely driven by an oversupply of raw milk. In November alone, Ukraine produced 35,000 tonnes more milk raw materials than in the same period last year. Much of this surplus was expected to be absorbed by export markets in the form of processed dairy products.
However, export demand remains weak. Global dairy markets are facing oversupply, while price competitiveness has deteriorated. As a result, inventories continue to build, placing further pressure on farmgate milk prices.
Consumption Decline Adds to Surplus
Domestic demand has also softened. According to AMP, average milk consumption in Ukraine stands at around 200 kg per person per year. However, forced migration and population displacement caused by the ongoing war have reduced the number of consumers, intensifying the surplus of raw milk in the domestic market.
This imbalance between supply and demand has limited processors’ purchasing capacity and further constrained price recovery.
Outlook: Continued Pressure Expected
Industry experts expect further declines in milk purchase prices at the start of next year. Seasonal factors, including holiday-related accumulation of raw milk, are likely to add to oversupply. At the same time, AMP noted that the production of butter and skimmed milk powder remains unprofitable, reducing processors’ ability to absorb excess milk.
The association also highlighted that falling milk prices are not unique to Ukraine. Similar trends are visible in the United States and several European countries, reflecting broader global market weakness.
Market participants anticipate that stabilisation in raw milk and finished dairy product markets may only emerge in the second half of 2026, once global supply and demand rebalance.
Resilience in the Industrial Dairy Sector
Despite these challenges, Ukraine’s industrial dairy sector has shown resilience. According to Ukrinform, dairy farms have managed to offset declining household milk production. Since the beginning of the year, milk yields have increased in 16 regions, demonstrating improvements in farm efficiency and management even amid wartime constraints.
