2025 was the first year since independence when farmers increased their cow herds and raw milk production by almost 7%. However, the situation in the dairy market is currently such that, according to forecasts, up to 25% of dairy farm owners may decide to close them. Olena Zhupinas, Deputy General Director, Head of Cooperation with Processing Projects at the Association of Milk Producers, told UNN why this might happen.
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 and keeping, which requires large financial investments in restructuring and modernization. Due to a lack of funds to meet legal requirements, up to 25% of dairy farm owners may decide to close them.
The situation that has arisen in the domestic market, particularly due to the fall in world prices for butter, also does not contribute to the development of dairy farming.
"According to expert estimates, as of December 1, about 10 thousand tons of butter have accumulated in the warehouses of processing enterprises in Ukraine. And this is an alarming signal. Yes, in recent months, butter exports have decreased, and imports have increased. Large warehouse stocks put pressure on the market, and, unfortunately, not all factories will withstand this pressure and will be forced to leave the market," says Zhupinas.
According to her, ex-factory prices for butter have been falling for the third month in a row: in August, it was 400 UAH/kg, and at the beginning of December - 250 UAH/kg.
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"The decrease in prices for butter and cheese was reflected in the purchase price of raw milk. Already now, milk producers are working at the limit of their cost, and its further reduction may lead to unprofitability of milk production for approximately 40% of producers," explained the representative of the relevant association.
Read more about the situation in the dairy market in the UNN material "Butter prices are falling, warehouses are overflowing: what is happening in the Ukrainian dairy market and what are the forecasts"