Ukrainian Dairy Farms on the Brink of Shutdown: Causes of Plummeting Prices and a Timeline for Recovery

Financial Crisis Grips Ukraine's Dairy Farms

According to Главком: Dairy farms across Ukraine are confronting a severe financial crisis that threatens to force them to halt operations. This dire situation stems from a sharp drop in the purchase price for milk, which fell by 0.5-1 UAH/kg starting February 1st, pushing the price range for extra-grade milk down to 13.5-14.0 UAH/kg. The primary drivers of this decline are power supply disruptions, difficulties in selling finished products, and competitive pressure from imported goods on supermarket shelves. This crisis is unfolding within a sector that has long struggled with profitability.

The problem of falling raw milk prices has been a persistent issue for the past 30 years. Given the current pressures, many farmers may abandon cultivating feed crops like corn if conditions do not improve. Some farms are already planning to cut production volumes, as the cost to produce one kilogram of milk was 15.30 UAH/kg on February 1st, while the projected purchase price could fall to 12 UAH/kg (excluding VAT), guaranteeing significant losses.

Mounting Losses and Market Forecasts

For instance, the agricultural enterprise 'Peremoga' is incurring daily losses of 36,000 UAH, with total losses for February 2026 potentially reaching around 1 million UAH. Overall, daily losses for such farms can hit 90,000 UAH, or nearly 3 million UAH per month. Experts predict a market recovery may not occur until September-October 2026. Throughout 2025, the average milk price remained at a challenging €0.36-0.4/kg for producers, underscoring the prolonged nature of this downturn.

Farmers are hoping for better conditions soon, but in the absence of positive signals, they may be compelled to make the difficult decision to suspend their businesses.

The situation in Ukraine's dairy market highlights the sector's deep-rooted problems, now exacerbated by external factors like import competition and energy crises. Farmers, already facing severe financial strain, may be forced to cut production or even shut down entirely if milk prices do not stabilize. The projected market recovery in mid-2026 could be a critical turning point for the survival of many Ukrainian dairy farms.