Dairy farms in Ukraine are being forced to operate at a loss. As of February 20, the average purchase price of raw milk paid by dairy processing plants stood at UAH 13.5 per kilogram, while production costs range from UAH 15.5 to 16 per kilogram, ProAgro Group reports.

Between 10% and 20% of dairy producers may be forced to shut down their farms, said Olena Zhupinas, Deputy CEO of the Association of Milk Producers (AVM).

“This primarily concerns farms with up to 400 cows, as their production costs are higher than those of large-scale farms. Overall losses may reach 10–15%. If the crisis drags on, we could lose up to 20% of farms,” Zhupinas noted.

Since early February, Ukrainian dairy processing plants have been purchasing less raw milk from farmers at lower prices. The sector is also under additional pressure from imported products, mainly cheeses, which already account for more than half of the domestic market.

As reported earlier, Ukrainian dairy farms are facing severe financial pressure, with production costs exceeding purchase prices, resulting in losses of up to UAH 2.5 per liter of milk.

Source: UNIAN