The latest USDA annual report for Ukraine’s dairy sector makes interesting reading, particularly if you’re milking cows in Western Europe. Here’s some highlights.
Fluid milk production in Ukraine is expected to continue to decrease in 2016-17 because of a lack of foreign markets for Ukrainian dairy products, low world market prices and increased competition in the region although fluid milk production may start to stabilise in 2017 as no new market shocks are expected.
A decrease in cow number will continue a two-decade trend although accompanied by increased productivity.
Being relatively low-efficient producers, rural households use a low-cost production model with a lot of seasonal grazing and minimum usage of expensive feeds or veterinary medicine.
The quality of milk from household’s remains quite low however Ukrainian dairy processors cannot avoid using household milk due to insufficient quality (the report says quality but I guess they mean quantity) of industrially produced milk.
In 2015, 32% of milk sold for processing came from households.
Exports of almost all processed dairy products to Russia, which was a major market for Ukraine, stopped in 2014 and is not expected to recommence anytime soon.
EU has partially opened its dairy market for Ukrainian dairy products under the Deep and
Comprehensive Free Trade Agreement.
The European Commission has cleared 14 Ukrainian milk and dairy companies as authorised exporters to the EU.
Ukrainian companies have only conducted test shipments to the EU, market development will take some time as traditional Ukrainian products are very different from those demanded by EU consumers.
Ukraine will continue to export dried dairy products and butter to utilize excess milk supply.
Industry’s efficiency will be improving due to increased investments in industrial milk production.