Ukraine’s milk processing rises 6% in first half of 2026
Ukraine processed 6% more milk in the first half of 2026 than a year earlier, extending growth that lifted annual throughput to 3.6 million tonnes in 2025. Farm investment and higher commercial milk output are supporting processors, while counterfeit products and unregulated trade remain major risks.
Processing remains above pre-war levels
Ukraine’s milk processors increased throughput by 6% year on year in the first half of 2026, according to Ukrinform and Delo.ua, citing Vadym Chaharovskyi, head of the Union of Dairy Enterprises of Ukraine. Industry participants expect the growth rate to strengthen through the end of the year.
The latest increase extends a recovery that has taken processing above its pre-war level despite continued disruption from the war. Ukrainian plants processed 3.6 million tonnes of milk in 2025, compared with 3.2 million tonnes in 2021. The first-half result indicates that processors are continuing to expand from the higher 2025 base rather than merely recovering lost volume.
Commercial farms supply additional milk
Chaharovskyi identified increased production at commercial dairy farms as a principal driver. Investments and forecasts associated with new farm construction are beginning to translate into greater raw-milk supply. This is particularly important as the number of cows continues to decline in household farms because of low milk prices and high feed costs.
The industrial segment is moving in the opposite direction. Ukrinform reported that commercial farms increased their cow herd by 3% over the year. The shift toward larger farms can give processors a more consistent supply of milk and support higher plant utilization, although the sources did not provide an absolute processing figure for the first half of 2026.
Additional milk is also being converted into exportable commodity dairy products. No breakdown by product, destination or export volume was disclosed. On the domestic market, retail promotions remain central to sales: some dairy companies sell as much as 60% of their goods through promotional offers, according to Chaharovskyi.
Shadow market complicates formal growth
The expansion of registered processing is accompanied by concern over counterfeit dairy products and unregulated operators. Chaharovskyi said the State Service of Ukraine on Food Safety and Consumer Protection had issued 726 operating permits for dairy production, while only 243 enterprises reported activity to the tax authorities in 2025. He said roughly 500 permit holders were not actually operating and alleged that their names were being used for counterfeit production.
Ukrainian lawmaker Bohdan Kytsak linked the problem partly to a moratorium on scheduled and unscheduled inspections introduced in 2022. Parliament, the dairy industry association and government agencies are working on legislative changes intended to reduce the shadow market.
The proposals include reviewing Resolution No. 434, which governs border crossings by individuals. Industry and government representatives say the current rules can be used by organized groups to bring substantial quantities of goods into Ukraine without taxes, food-safety supervision or appropriate laboratory testing. Authorities also plan to review simplified procedures for humanitarian food imports that can enter without veterinary and phytosanitary certificates. For formal processors, stronger enforcement could be as important as additional milk supply: higher throughput improves capacity use, but unchecked counterfeit and grey-market goods can weaken prices and erode compliant companies’ share of the domestic market.
