Summer is traditionally associated with vacations and leisure, but for many Ukrainians, the cost of food in the refrigerator remains a pressing issue. Amidst general inflation and a complex economic situation, the dairy market is demonstrating remarkable stability. Industry experts offer an encouraging forecast: a sharp increase in the prices of milk, kefir, and yogurts is not expected in July, and some products will be sold at reduced prices.

Arsen Didur, Executive Director of the Union of Dairy Enterprises of Ukraine, clarified the market situation in an interview with RBC-Ukraine. According to him, retail chains will continue to run promotional campaigns, allowing consumers to purchase certain items at lower prices.

The Price Paradox: Cheap Raw Materials and Stable Retail

The key factor keeping prices afloat has been the drop in raw material costs. The procurement price for raw milk has approached the cost of production since the beginning of the year, falling by almost a quarter over the past year. However, as Didur notes, the final shelf price is not determined solely by the cost of raw materials.

The final checkout total is influenced by logistics, packaging, energy costs, and, most importantly, retail markups. Dairy companies are currently forced to operate in a mode of constant promotions, the cost of which effectively falls on the shoulders of the supplier rather than the retailer. This is why consumers see discounts, even though the profitability of manufacturers is decreasing.

The forecast for July looks as follows:

  • Milk and fermented milk products: stable prices, with possible discounts in the mass market segment.
  • Butter and hard cheeses: prices will remain stable, with no sharp spikes expected.

What Actually Determines the Price of Milk?

The market situation is complex and depends on many intertwining factors. Arsen Didur identified four key elements determining the cost of dairy products today:

1. Global Market Conditions. Ukraine processes almost half of its milk into butter (compared to 29% in the EU). This makes the market extremely sensitive to stock market quotes. Over the past year, global butter prices have fallen by half, which was immediately reflected in domestic procurement prices.

2. Cost of Production. Despite cheap raw materials, expenses for feed, fuel, labor, and electricity are not decreasing. For the dairy industry, which works with perishable goods, blackouts become a critical threat: any power outage leads to direct losses and the rejection of raw materials.

3. Purchasing Power and War. Exchange rates, export conditions, and war risks continue to exert pressure on the industry's economy.

4. Retail Practices. Untimely settlements and the shifting of financial risks from retail chains onto manufacturers is a hidden factor that also pressures procurement prices, although it is discussed less often than the cost of feed.

The Raw Material Issue: Moving Towards Industrialization

The question of a shortage of raw materials for factories remains relevant, but the situation is changing. By the end of 2025, 3.22 million tons of raw cow's milk were supplied for industrial processing. It is important to note a structural shift: while personal subsidiary farms previously provided a significant share, today about 90% of raw materials for factories are supplied by industrial farms.

It is precisely the industrial sector that ensures consistently high product quality. The share of personal farms is shrinking, while the role of modern dairy farms is growing. The forecast announced at Agro Ukraine Week 2026 suggests that the share of industrial farms will grow from 46% in 2025 to 55% in 2027.

Total milk production in the country may decrease slightly (to 6.8 million tons in 2026) due to a reduction in livestock in private farms. However, this will not lead to a shortage for factories: the industrial sector is increasing volumes, compensating for the decline in the private sector. Thus, the raw material base for the stable operation of enterprises remains secured.