Ukraine's dairy industry on verge of losing 20% of industrial production – industry association
Ukraine's dairy industry has entered its deepest crisis in recent years due to procurement prices falling below cost, creating a risk of losing 20% of industrial milk production by the end of 2026, said Olena Zhupinas, deputy director general of the Dairy Producers Association, at a roundtable of the parliamentary committee on agrarian and land policy.
According to the association, in 2025-early 2026, raw milk procurement prices fell 23% and in February averaged UAH 13.5 per kilogram (excluding VAT), while direct operating costs exceed UAH 16 per kilogram. Even highly efficient industrial farms with 1,000-1,200 cows have been accumulating over UAH 1 million in losses monthly for the fourth consecutive month.
"The dairy industry is entering its deepest crisis in recent years. Without prompt decisions in 2026, we risk losing part of our production capacity, which will be extremely difficult to restore after the war. For producers, the decision on support before the planting season is a choice: plant feed and preserve the herd or shut down production," the Dairy Producers Association press service quoted Zhupinas as saying.
To stabilize the situation, the association proposes introducing a special subsidy of UAH 8,000 per cow for industrial farms with 50 or more head. The potential volume of this program is estimated at EUR 62 million. Without such support, by the end of 2026 the country could lose 500,000-600,000 tonnes of milk, representing nearly 20% of industrial production.
The second initiative is creating fair market conditions by regulating unfair trading practices by retail chains. Today, retailers' financial risks are transferred to producers and processors, directly pressuring procurement prices. Without legislative changes, it is impossible to stabilize the farm-processing-trade chain.
The association also emphasizes the need to stimulate demand through public procurement that should focus on domestic producers. In particular, launching a "School Milk" program for 4.4 million schoolchildren would ensure guaranteed sales of 195,000 tonnes of milk per year, representing about 5% of processing volumes.
"The association's position is not a request for preferences but a response to the scale of challenges. 2026 will be a turning point: either decisions will be made now, or losses that can still be avoided today will cost the state much more tomorrow," the industry association said.
