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MIlk Production to Begin Upward Trend

25 October 2012

UKRAINE - Production of raw milk will grow slightly in 2012/13, driven by higher efficiency of dairy farm, according to the latest USDA Foreign Agricultural Service report.

The number of dairy animals in the country had ended its 21 year declining trend and will stabilize in 2012. The trend for improved efficiency of dairy animals will continue in the near future, thus milk production has passed its minimum in 2011 and will be modestly increasing in 2012-13. Significant raw milk production increases are unlikely due to limited international and domestic demands for Ukrainian dairy products.

The price of raw milk is expected to remain high following the high price of feeds and other inputs. Recent trend for investments into industrial dairy farms will continue, but the number of upgraded farms is likely to remain insignificant with limited impact on total milk production. Cheese will remain the most profitable Ukrainian exports commodity with markets in Russia and Former Soviet Union (FSU) countries.

Cheese will continue to face serious sanitary and technical barriers in destination markets. Production and exports in 2012 are expected to be below forecasted level due to export barriers. Exports of dried milk products will remain the second best alternative and will continue to utilize the extra milk that became available after cheese exports contracted.

Imports of butter from New Zealand, Belorussia and EU will grow in 2012, but would remain insignificant overall. The cost of imported products puts them in the upper market segment due to expensive logistics and custom clearance.

Further Reading

You can view the full report by clicking here.

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