Due to a decline in exports and a lull in the global milk market during the winter holidays, raw milk prices in Ukraine are stabilizing, and from the beginning of January, purchase prices are expected to decline, according to the Association of Milk Producers (AMP).
The AMP noted that the average purchase price of extra-grade milk, as of December 25, amounted to 19.60 UAH/kg (excluding VAT), which is 0.2 UAH more than a month ago. The prices for premium milk remained unchanged at 18.64 UAH/kg (excluding VAT) and first-class milk at 17.65 UAH/kg (excluding VAT). The weighted average price of the three milk grades amounted to 18.63 UAH/kg (excluding VAT), which is 0.7 UAH more than the previous month.
The industry association noted that in the second half of December 2024, purchase prices stabilized due to a decrease in demand for raw milk in Ukraine and surpluses in the market. This is due to a decrease in dairy exports during the Christmas holidays.
In addition, lower butter prices in the US, New Zealand, and Europe are restraining the exports of Ukrainian companies and holding back the growth of raw milk prices in the country.
“In 2024, butter prices were the main driver of raw milk prices growth. Further decline in butter prices is likely, as stocks of the product accumulate in warehouses. The decision of Poland to bring to the market a thousand tons of butter from its own strategic reserves to help stabilize prices for the product had a certain impact on the decline in butter prices,” the AMA explained.
The industry association suggested that the increase in the supply of raw milk in Ukraine is likely to be associated with a decrease in sales of dairy products due to lower purchasing power. Ukrainians with lower incomes are refusing to buy dairy products due to rising prices. Accordingly, demand for spreads as a cheaper alternative to butter is growing.
Experts expect a decrease in purchase prices from the beginning of January 2025 due to a possible increase in surplus raw milk on the domestic market.
As reported, in November 2024, the slowdown in dairy exports was caused by a shortage of raw milk, rising production costs due to falling global dairy prices, and a seasonal decline in the market ahead of the holidays.
