Dairy farms increased raw milk production volumes in 2025 but saw a slowdown in yields in December. It is likely that in 2026, milk production in the industrial sector will decline amid crisis phenomena in the global dairy market, unfavorable weather conditions, electricity shortages, and rising production costs, reports Georghii Kuhiashvili, analyst at the Association of Milk Producers.
According to preliminary data from the State Statistics Service, in December 2025, farms of all categories produced 478 thousand tonnes of raw milk, which is 29 thousand tonnes less (-6%) compared to November of the current year and 75 thousand tonnes less (-14%) compared to December 2024. In January–December 2025, milk yields in Ukraine amounted to 6.86 million tonnes, which is 374 thousand tonnes less (-5%) relative to the previous year. In December 2025, the share of enterprises in raw milk production was 57%, while household farms accounted for 43%.
Enterprises produced 271 thousand tonnes of raw milk in December 2025, which is 6 thousand tonnes more (+2.1%) compared to November 2025, but 12 thousand tonnes less (-4%) compared to December 2024. In January–December 2025, dairy farms produced 3.18 million tonnes of raw milk, which is 210 thousand tonnes more (+7%) than the previous year.
In household farms, milk yields in December 2025 amounted to 206 thousand tonnes, which is 35 thousand tonnes less (-14%) compared to November 2025 and 64 thousand tonnes less (-24%) compared to December 2024. In January–December 2025, the household sector produced 3.67 million tonnes of raw milk, down 583 thousand tonnes (-14%) from the previous year.
Georghii Kuhiashvili notes that raw milk production volumes in Ukraine are decreasing primarily due to the household sector, which is ceasing to play a significant role in the dairy industry. It is likely that if individual peasant households do not undergo consolidation by 2030, their milk will stop entering processing channels and will be used only for self-consumption. To remain in the industry, these households must unite into cooperatives to form commercial milk batches or independently increase their cow inventory and develop craft dairy production.
The industrial sector compensates for the declining share of household farms and demonstrates stability in raw milk production. Despite blackouts and Russian missile and bomb strikes, the growth rate of raw milk production in Ukraine’s industrial sector in 2025 was among the best in Europe and the world. For comparison, milk yield growth rates since the beginning of 2025 were +2.3% in the USA, +1.8% in New Zealand, and +1.2% in the EU.
However, in December, yield volumes in the industrial sector decreased compared to the previous year due to lower raw milk procurement prices, pressured by the crash of global commodity prices, including butter. An unpredicted increase in yields in the second half of 2025 in the USA, Oceania, South America, and Europe led to a global oversupply of commodities that proved difficult to sell and continue to pressure prices. Additionally, buyer activity traditionally slows down in December during the New Year holidays.
Low raw milk prices do not match production costs at dairy farms, which saw increased expenses due to power supply problems that worsened in January 2026 and the need to spend more on diesel generators. Long hours of blackouts caused disruptions in the shipment of raw milk from farms to processing plants. Factories report being unable to accept milk for processing when the power is out. Severe frosts this winter, coupled with heating issues, have contributed to a reduction in cow productivity.
In these crisis conditions, dairy farms may review their investment plans for 2026, as it is problematic to increase raw milk production during blackouts, and a significant recovery in domestic demand for dairy products is unlikely in the short term. It is probable that in 2026, the reduction in raw milk production will occur not only in the household sector but also in the industrial sector. Due to unprofitability, the closure of certain farms with fewer than 400 head of cattle is likely. In such a case, raw milk production in Ukraine could drop to 6.0–6.2 million tonnes. However, those dairy farms that manage to maintain their cow inventory in 2026 and invest in sustainability are expected to benefit in the coming years.
Stabilization of the global dairy market is likely in the third quarter of 2026, as evidenced by the price growth of key commodities in the 395th and 396th GDT auctions. It is expected that global milk supply will begin to lag behind demand in 2027, and the EU will enter a structural milk deficit in 2029–2030. In Europe, demand for milk powder and butter will grow. Ukraine likely has the opportunity to satisfy this deficit in the EU, given its lower raw milk production costs, and to establish a foothold in the dairy markets of the Middle East and North Africa. Europeans will struggle to compete in these regions with producers from the USA, Latin America, and Oceania in terms of commodity production costs.
However, processing remains the weak point of Ukraine's dairy sector. Most domestic dairy processors are smaller in scale than export-oriented plants in the USA and certain EU countries, where processing capacities can reach 1,000 tonnes of milk per day. Such volumes allow for the efficient production of low-margin commodities and the offsetting of production costs through volume.
Therefore, milk producers should attract investment into the development of cooperative processing by 2030. Having their own processing will allow for stable earnings from both raw milk and finished product production, as well as increased financial resilience and fixed margins. Deeper integration of milk production and processing will help avoid systematic crises in the dairy market and improve business predictability. An alternative path could be closer cooperative agreements between milk producers and existing processing plants, provided they ensure stable sales of finished products and offer acceptable procurement prices.
In January–December 2025, raw milk production volumes were increased by agricultural enterprises in 14 regions, specifically: Zakarpattia (+30%), Khmelnytskyi (+24%), Lviv (+14%), Rivne (+14%), Ternopil (+12%), Vinnytsia (+10%), Mykolaiv (+9%), Ivano-Frankivsk (+8%), Zhytomyr (+7%), Poltava (+7%), Chernihiv (+7%), Volyn (+6%), Kyiv (+5%), and Cherkasy (+5%) relative to the previous year.
In January–December 2025, about 55% of raw milk was produced by agricultural enterprises in the following regions:
- Poltava region – 474.5 thousand tonnes;
- Cherkasy region – 389.9 thousand tonnes;
- Khmelnytskyi region – 317.2 thousand tonnes;
- Chernihiv region – 287.0 thousand tonnes;
- Vinnytsia region – 285.4 thousand tonnes.
Regarding beef production, according to preliminary estimates from the State Statistics Service, in January–December 2025, cattle slaughter volumes at enterprises amounted to 126.38 thousand tonnes, which is 3 thousand tonnes (-2%) less than the previous year. The largest portion of cattle (58%) was sold for slaughter by agricultural enterprises in the following regions:
- Kyiv region – 18.52 thousand tonnes;
- Poltava region – 15.73 thousand tonnes;
- Cherkasy region – 14.37 thousand tonnes;
- Vinnytsia region – 12.16 thousand tonnes;
- Chernihiv region – 11.62 thousand tonnes.
Press Service of the Association of Milk Producers
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