Ukraine milk production falls 10% in Q1, households show sharpest decline

Raw milk production in Ukraine decreased 10% year-on-year in January-March 2026 to 1.31 million tonnes, the Association of Milk Producers said, citing State Statistics Service data.

The industry association said that in March 2026, farms of all categories produced 496,200 tonnes of milk, down 10.7% compared to March 2025. Meanwhile, the industrial sector showed growth: enterprises produced 285,800 tonnes of raw material (+4.9%), while household production collapsed 25.8% to 210,400 tonnes.

"Milk producers are under pressure from lower purchase prices and increased production costs. A spike in oil prices due to the conflict in the Middle East has led to more expensive logistics. Natural gas has also become more expensive, triggering a rise in nitrogen fertilizer prices. Specifically, urea has become nearly 50% more expensive year-on-year following Iran’s blockade of shipping through the Strait of Hormuz," the association said.

Association analysts said that labor shortages, security risks, power supply problems, and limited access to credit remained among the key obstacles for business in March. The situation is particularly critical in the Kharkiv region, where constant shelling and landmines have forced farmers to evacuate farms or abandon the sowing season.

The association said that an additional challenge is adapting to new requirements of the EU Common Agricultural Policy for 2028-2034. The European approach involves moving away from payments per hectare or head of livestock in favor of meeting environmental KPIs (soil protection, biodiversity).

"The new architecture of the EU agricultural policy requires significant modernization costs from Ukrainian producers. Under martial law and with milk prices below cost, farmers are in acute need of state support. Currently, 10-15% of small and medium-sized dairy farms are at risk of closure," the association said.