Ukraine expands dairy industry with 125 modernized farms

UKRAINE – Ukraine’s Minister of Agrarian Policy and Food has announced that dairy production is relocating to central and western regions.

According to Vitalii Koval, Ukraine’s Minister of Agrarian Policy and Food, the country is currently constructing and modernising 125 dairy farms, primarily in the central and western regions, despite challenges posed by the ongoing conflict.

During the Dairy Industry: Ukraine – EU conference, Vitalii stated that the expansion reflects a commitment to value-added agriculture rather than reliance on raw material exports.

He emphasized that livestock and processing should account for more than 50% of Ukraine’s agricultural sector, highlighting the importance of fair profit distribution among producers, processors, and retailers.

“Only synergy between all stakeholders can produce the scale effect needed to create added value both domestically and for export. I’m grateful for the open and professional dialogue. It was a productive discussion that, I’m confident, will yield practical results for the industry. Pricing is key to fairness in the value chain,” Koval stressed.

The Ukrainian government has also introduced targeted subsidies to support dairy farmers. In April 2025, the State Fund for Support of Farms allocated UAH 386.5 million (US$9.6 million) to 7,766 recipients, helping them invest in infrastructure and modernisation.

Additionally, a new round of dairy cow maintenance subsidies was launched in May 2025, further reinforcing the sector’s growth.

Koval stressed the need for Ukraine to transition from raw material exports to finished dairy products, citing a stark contrast in market value: while a ton of Ukrainian agro-exports is worth €291, the same quantity in the EU is valued at €1,536. This shift aims to enhance profitability and competitiveness in global markets.

Ukraine’s Dairy Sector

Ukraine’s dairy sector has been a strong contributor to the national economy, with milk production reaching approximately 8.1 million tons in 2023.

Despite disruptions caused by the conflict, the industry has maintained steady output, with industrial dairy farms accounting for over 90% of processed milk.

However, recent data indicates a 4% decline in milk production in early 2025 compared to the previous year. This drop is attributed to infrastructure damage, logistical challenges, and reduced domestic demand.

Additionally, Ukrainian dairy exports face potential restrictions due to expected EU quotas on milk and dairy products, which could impact trade opportunities.

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