Export demand could lift Ukrainian raw milk prices to 16–16.5 hryvnias per kilogram
Ukrainian farmgate milk prices could reach 16–16.5 hryvnias per kilogram excluding VAT in October as processors and exporters compete for tighter supplies. Higher logistics costs, weaker domestic demand and losses caused by attacks on distribution infrastructure may limit further gains.
Farmgate prices rise in September
Ukrainian raw milk procurement prices continued to rise in the second half of September, supported by demand from processors and exporters as supplies contracted in some regions. The weighted average price across three quality grades stood at 15.40 hryvnias per kilogram excluding VAT on September 20, according to UkrAgroConsult, an increase of 0.65 hryvnia per kilogram from a month earlier.
Extra-grade milk averaged 15.60 hryvnias per kilogram excluding VAT, while higher-grade milk reached 15.40 hryvnias and first-grade milk 14.70 hryvnias. First-grade milk posted the largest monthly increase, gaining 0.90 hryvnia per kilogram. Delo reported that the weighted average nevertheless remained 10% below its level in September 2025, showing that the latest rise has not fully reversed the earlier decline.
Exports and lower EU output support demand
The Association of Milk Producers expects procurement prices to remain within 15.50–16.00 hryvnias per kilogram in September and potentially climb to 16.00–16.50 hryvnias in October, UkrAgroConsult reported. Strong foreign demand for Ukrainian butter and milk powder is one of the main sources of support. Lower milk production in parts of the European Union is helping sustain global prices for these products and improving market conditions for Ukrainian processors.
Rabobank forecasts that EU milk production could fall by almost 2% year on year in the fourth quarter, according to UkrAgroConsult. A decline of that scale could keep demand for Ukrainian dairy ingredients firm and intensify competition for domestic raw milk. Smaller Ukrainian processors serving the local market are also purchasing more milk. Delo and AgroPolit reported that retailers have increased cooperation with local manufacturers after Russian strikes damaged some distribution centers, creating an additional source of demand for raw material.
Logistics and product losses constrain processors
The higher farmgate price does not translate directly into stronger processor margins. Russian attacks on warehouses and distribution centers have disrupted deliveries, damaged finished goods and forced companies to use longer transport routes. Market participants cited by Delo estimate that retailers in some cases require processors to compensate for 50–100% of products lost in attacks. Those obligations add to delivery costs and can absorb part of the extra revenue generated by higher dairy product prices.
Weak domestic consumption and difficulties selling finished products may also cap procurement prices, UkrAgroConsult said. Processors therefore face opposing pressures: export markets and restricted milk supply support higher bids for farm output, while logistics costs and compensation for destroyed goods reduce their ability to pay. The expected October range of 16–16.5 hryvnias per kilogram will depend on whether export demand remains strong enough to offset those constraints. For dairy farms, the increase offers better nominal revenue, but processors and traders will continue to assess purchases against transport risk, local retail demand and margins on butter and milk powder.
