Ukraine dairy, beef production continues downward trend - GAIN

War has significantly disrupted markets and production
calendar icon 15 September 2023
clock icon 2 minute read

Ukraine cattle inventory is expected to remain on its historical downward trend in 2023 and 2024, according to a recent US Department of Agriculture (USDA) Global Agricultural Information Network (GAIN) report.

Ukrainian cattle production remained on its 30 years downward trend. Beef remained the most expensive mass-market protein, and its price grew notably in 2023, inspired by the competing pork prices increase and the world market situation. 

Domestic demand suffered from a consumer number drop and decreased disposable incomes. Ukrainians continued to substitute poultry and pork products for beef. Unable to find consumers at home, a significant number of live cattle and beef continued to be exported. Danube River ports served as export outlets with major markets in North Africa and the Middle East. No trend change is expected in the remaining months of 2023 and 2024.

The Ukrainian cattle population consists predominately of dairy and dual-purpose animals and is concentrated largely in rural households. Livestock inventory heavily depends on the dairy market situation and milk prices and requires uninterrupted logistics for milk sales. The latter has proved to be the biggest challenge during wartime. Unable to sell perishable milk, many industrial dairy farmers had no choice but to reduce animal inventory. The drop was especially large in the early months of the war when the Russian army progressed significantly in northern, southern, and eastern Ukraine. Similarly to many countries, Ukrainian dairy production is concentrated in proximity to large urban centers. The war impacted a lot of large and efficient dairy producers in urban eastern Ukraine.

As the front line stabilized in late 2022, animal inventory losses of industrial farms levelled. In 2023, the industrial animal inventory decreased insignificantly. However, the losses in household production remain notable. Household milk production is mainly for subsistence, although a considerable share of milk and beef is sold through open-air markets, which remain important channels for red meat sales in general. 

Unlike industrial production, household production is distributed evenly all over the Ukrainian territory. Occupation of almost 20% of Ukrainian territory resulted in a corresponding household animal inventory reduction in 2022. Population outflow resulted in a further animal number drop. In 2023, household sector’s livestock contraction slowed down but remained significant. Ukraine’s dairy producer association believes that the industrial sector lost between 70,000 and 100,000 dairy cows due to war-related reasons by the end of 2022. This additional decrease exaggerated the historic animal number decline associated with comparatively low production efficiency.

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