Stabilization with growth prospects: what can adjust dairy prices
12 May 2025 09:42
In early May, Ukraine saw a certain stabilization of raw milk prices amid a recovery in demand for dairy products in export markets. This was reported by the Association of Milk Producers, "Komersant Ukrainian" reports.
At the same time, according to the Association’s analyst Giorgi Kukhaleishvili, given the decline in demand for dairy products in the domestic market, the prospect of rising purchase prices depends on how much exports will grow in the short term.
What is the current price situation
As of May 5, the average purchase price of extra-quality milk amounted to 16.12 UAH/kg excluding VAT, which is 3 kopecks less than a month ago. The range of prices for this grade on farms varies from 15.50 to 16.50 UAH/kg excluding VAT and has not changed over the past month.
The highest grade costs on average 15.93 UAH/kg excluding VAT (-2 kopecks). Prices for premium milk range from 15.30 to 16.20 UAH/kg excluding VAT. The lower and upper limits remained unchanged.
The average price for first-class milk amounted to 15.60 UAH/kg excluding VAT and remained unchanged compared to the first half of last month. The minimum price on farms was 15.00 UAH/kg. The maximum price was 15.80 UAH/kg. The price range remained unchanged.
Accordingly, the weighted average price of the three grades amounted to 15.97 UAH/kg excluding VAT, which is 3 kopecks less than in the previous period.
What is happening with supply and demand
In early May, there was no shortage of raw milk on the Ukrainian domestic market. The supply of milk remained high, while the demand for finished products was low.
According to Giorgi Kukhaleishvili, the balance has changed in the finished dairy market amid an increase in exports.
“Stocks of exchange-traded goods in warehouses have decreased and this has led to a certain stabilization of raw milk prices, which have hardly changed compared to the results of the monitoring conducted in early April 2025. The profitability of dairy products made from premium milk has improved,” the expert emphasized.
What may further influence the price situation
According to Giorgi Kukhaleishvili, the growth of purchase prices may be restrained by the European Commission’s abolition in June of autonomous trade measures for milk and dairy products from Ukraine, which since 2022 allowed domestic processing companies to supply their products to Europe without quotas and duties.
The expert reminded that the Association of Milk Producers and the Union of Dairy Enterprises of Ukraine have urged the European Commission to extend the autonomous trade measures for milk and dairy products beyond June 5, 2025, as the continuation of duty-free trade with the EU is important for supporting the dairy industry in Ukraine.
If this does not happen, then, according to the expert, unsold products will accumulate in warehouses and restrain the growth of raw milk prices in Ukraine. If the autonomous trade measures are extended, it is likely that raw milk prices will be revised upward in the second half of June, as export markets are favorable for Ukrainian suppliers of commodities.
World prices for dairy products are rising
on May 6, the Global Dairy Trade price index for dairy products increased by 4.6%. This was reported by the analytical agency INFAGRO.
Mozzarella symbolically fell by 0.3% to $4752/t. The rest of the exchange dairy products rose in price, and some very rapidly:
– lactose by 16.8% to $1611/t,
– Cheddar by 12% to $5519/ton,
– whole milk powder by 6.2% to $4374/t,
– dry butter by 6.2% to $3060/t,
– dehydrated milk fat by 5.4% to $7212/t,
– butter by 3.8% to $7992/t,
– skimmed milk powder by 0.5% to $2828/t.
The auction was attended by 75 participants. The weighted average price for dairy products amounted to $4516/t. The next GDT auction will be held on May 20.
According to the Association of Milk Producers, over the past year, prices for whole milk powder (plus 30.6%), skimmed milk powder (plus 10.9%), butter (plus 20.2%) and cheddar cheese (plus 29.6%) have increased in the world.
