Ukraine: Dairy production inched down in 2024
Abnormal heat and consistent outages due to the repeated attacks on Ukrainian energy infrastructure has driven Ukrainian milk production down. However, the outlook for 2025 remains largely positive, reports Infagro, a local think tank.
Ukraine’s raw milk production was 7.2 million tonnes last year, down 3% compared with 2023 and 17% lower than in 2021. As in previous years, the production dynamics remained the opposite in the backyard and industrial sectors: the former is gradually dying out, while the latter is expanding its operations.
Industrial farms in Ukraine saw a 5% rise in raw milk production compared with the previous year to 3.1 million tonnes.
According to analysts, a rise in dairy herd productivity was the key factor fueling the growth in production in the industrial sector. The dairy herd population in Ukraine has shrunk over the last few years, and at the end of 2024, the industrial sector is believed to have 375,000 cows, slightly below that of a year earlier.
Dairy production pre-war level
Infagro also revealed that the rise in output in the industrial sector is triggering growth in dairy processing. Preliminary estimates show that Ukraine’s dairy plants processed 3.3 million tonnes of milk last year, 4% more than in 2023. It’s possible that in 2025, Ukraine’s plants will process 3.5 million tonnes of raw milk, exceeding the pre-war level.
“Quite a few leading farms are investing in milk production, and there is a hope that the growth will pick up the pace in 2025 since milk production profitability was exceptionally strong in 2024,” the analysts claimed.
High profits
Dairy processors also managed to earn good money last year. “Last year, there were also positive changes in the [milk processing] industry. Dairy manufacturers’ earnings were high. Many firms managed to increase sales of dairy products. Some factories aimed to earn a decent income from selling butter at record-high prices. Technological modernisation of a number of dairy factories was carried out,” Infagro stated.
However, closer to the end of the year, the cost of raw milk spiked, eating out into the dairy processors’ margins, the analysts indicated.
Exports remain strong
Foreign trade dynamics also look promising. Last year, Ukraine exported 600,000 tonnes of dairy products, which is more than what was forecast at the beginning of the year. On the other hand, dairy imports remained relatively low, close to 300,000 tonnes, the analysts noted.
