Ukraine's Dairy Sector in Crisis
The Association of Milk Producers of Ukraine (AVM) warns of a severe crisis threatening to wipe out up to 20% of the country's industrial milk production by the end of 2026. Producers are already operating at a loss due to a sharp drop in raw milk purchase prices. Specifically, prices fell by 23% in 2025 and early 2026. In February, the average price for raw milk is about 13.5 UAH per kilogram (excluding VAT), while producers' direct operating costs exceed 16 UAH per kilogram.
Industrial farms with 1,000 to 1,200 cows are incurring monthly losses exceeding 1 million UAH. Without state intervention, the industry risks losing 500-600 thousand tons of milk, which constitutes nearly one-fifth of the total industrial volume. This crisis unfolds against the backdrop of a wartime economy, where agricultural stability is crucial for national resilience.
Olena Zhupinas, a representative of the AVM, stated: 'The dairy industry is entering its deepest crisis in recent years. Without urgent solutions in 2026, we risk losing part of our production capacity, which will be extremely difficult to restore after the war.'
AVM's Proposals to Stabilize the Industry
The Association proposes three key measures to stabilize the sector:
- A direct subsidy of 8,000 UAH per cow for farms with herds of 50 or more, requiring estimated funding of approximately 62 million euros.
- Limiting unfair trade practices that currently shift the financial risks of retailers onto producers.
- Launching a 'School Milk' program for 4.4 million students, which would require about 195,000 tons of milk annually and ensure stable domestic demand.
The situation in Ukraine's dairy industry demands immediate action, as it impacts not only the economic stability of producers but also the country's food security. The proposed measures for financial support and demand creation could be vital steps toward stabilization. Timely government intervention is essential to preserve production capacity and support farmers during this challenging period.