Maks Fasteyev, Infagro Projects Partner, shared on the UA-82.5 channel key insights from the monthly report Raw Milk Market Overview, distributed to subscribers this week:

• The anticipated risks for May materialised in June. During the month, demand and prices for exchange-traded dairy commodities declined across all major export markets. Both June trading sessions of the world’s largest dairy auction, GDT, ended with negative price movements following positive results in May.

• Global raw milk supply continues to grow on a year-on-year basis, while the seasonal decline in milk production in the Northern Hemisphere has not yet been sufficient to rebalance the market. Weather conditions have not yet become a significant limiting factor: only in the final third of June did high temperatures emerge across the EU, with their impact on milk yields expected to become evident in July.

• During May and June, the Ukrainian raw milk market remained broadly balanced. Lower export competitiveness was offset by the seasonal decline in raw milk supply and a modest recovery in demand for fresh dairy products.

• Market balance is still being maintained through inventory accumulation, primarily butter stocks. Over recent months, amid declining bulk butter prices, processors have actively diverted milk into the production of milk powders while simultaneously building inventories of packaged butter. However, following the decline in EU SMP prices and another correction in bulk butter prices, this strategy is becoming economically unviable.

• At the beginning of July, another targeted increase in raw milk procurement prices is expected as processors seek to secure their raw milk supply during the hot season and the seasonal decline in milk yields. However, the current economics of commodity dairy production point in the opposite direction.

• At the end of June, prices for concentrated feed on the Ukrainian domestic market began to decline. This fact is creating a moderately positive outlook for dairy farming and should improve milk producers’ operating margins in July.

• The slowdown in the growth of raw milk supply from agricultural enterprises remains within expectations. During January–May, milk production increased by 3.7% year-on-year. According to preliminary estimates, May production was 5.6% higher than in May 2025, while the dairy cow population as of June 1 was 1.5% higher than a year earlier.

• Based on current trends in data published by the State Statistics Service of Ukraine, total raw milk production across all farm categories is projected to decline by 12% in 2026 to approximately 6.1 million tonnes.

• Raw milk production by household farms is expected to decrease by approximately 1 million tonnes in 2026. As a result, for the first time in more than 20 years, milk production by agricultural enterprises is projected to exceed production by household farms, marking a historic shift in the structure of Ukraine’s dairy sector.

UA-82.5