The Ukrainian dairy market is in a tense situation: butter stocks in warehouses are breaking records, exports are declining, and prices are changing. Olena Zhupinas, Deputy General Director, Head of Cooperation Projects with Processing at the Association of Milk Producers, told UNN about what is happening in the butter market and how it affects the dairy market in general.
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In recent months, about 10,000 tons of butter have accumulated in the warehouses of Ukrainian processing enterprises, which has become a serious challenge for the industry. Growing imports and falling exports are further pressuring the domestic market. Because of this, some factories may not withstand the load. The situation has already hit dairy farms, which are operating almost at cost.
As of December 1, about 10,000 tons of butter have accumulated in warehouses in Ukraine. And this is an alarming signal. In recent months, butter exports have decreased, and imports have increased. Large warehouse stocks are putting pressure on the market and, unfortunately, not all factories will withstand this pressure and will be forced to leave the market.
According to Olena Zhupinas, the price of butter has been falling for the third month in a row, which entails a decrease in the purchase price of raw milk.
Ex-factory prices for butter have been falling for the third month in a row. Thus, in August it was UAH 400/kg, and at the beginning of December UAH 250/kg. The decrease in prices for butter and cheese affected the purchase price of raw milk. Already now, milk producers are working at the cost limit, and its further reduction may lead to unprofitability of milk production for approximately 40% of producers.
In 2025, farms increased their cattle population and milk production for the first time in many years, but now these achievements may be threatened by the requirements of European standards for animal welfare, which requires considerable financial resources.
2025 was the first year when dairy farms increased their livestock and raw milk production by almost 7%. But price pressure could destroy these achievements as early as 2026. As part of European integration, by 2028, Ukrainian farms must comply with European requirements for animal welfare, which requires large financial injections into restructuring and modernization. Due to a lack of funds to comply with legal requirements, up to 25% of dairy farm owners may decide to close them.
In addition, Ukraine depends on global price fluctuations, as it exports about 20% of the butter produced to other countries - among the leaders are EU countries, Moldova, Kazakhstan, and Caucasus countries. The fall in world prices led to a decrease in exports. This also further exacerbates the situation on the domestic market.
We export 20% of the butter produced in the country, so the fall in prices on world markets led to a reduction in its exports, and the lack of protection from imports led to an increase in the import of butter from EU countries to Ukraine, which displaces Ukrainian butter from our domestic market.
In autumn, the EU increased the quota for Ukrainian butter from 3 to 7 thousand tons, but processors have not yet been able to take advantage of this opportunity due to low world prices, because enterprises cannot sell products at a favorable price, so exports are not growing.
Quotas for butter exports to EU countries have been in effect since October 29, they were increased from 3,000 tons to 7,000 tons. But due to the collapse of world butter prices, our processing enterprises have not yet been able to take advantage of this increase.
Also, the operation of production requires additional, considerable costs due to the blackout, because work is carried out using generators during power outages. But even despite this, dairy product prices will not rise yet.
Despite the additional costs incurred by both milk producers and processing enterprises due to blackouts and working on generators (the cost of one kilowatt produced by a generator increases several times), prices for dairy products in Ukraine in the first half of 2026 will not increase, but on the contrary - under the pressure of warehouse stocks and imports will be lower.