Despite the recent decline in farmgate milk prices, milk production in Ukraine remains profitable, while lower raw milk prices are the result of market fundamentals rather than collusion among dairy processors. This was stated by Yevhen Dudka, founder of the Volyn-Zerno-Produkt (Viliya) Group, in an interview with Latifundist.com
Speaking about the economics of dairy farming, Dudka said the business continues to generate positive returns.
“Milk production is still profitable. Our average yield is slightly above 39 litres per cow per day, while production costs are around UAH 12 per litre,” he said.
Before Russia’s full-scale invasion, the company planned to build a new dairy complex. However, those investment plans were redirected toward logistics infrastructure.
“As soon as the war began, we realised we had to build new logistics. During this period, we completed a terminal, using the funds originally allocated for the dairy complex. It was a choice between one or the other.”
According to Dudka, modern dairy farms require substantial investment and have long payback periods, making such projects difficult to finance with borrowed capital under current market conditions.
Commenting on falling raw milk prices, he rejected claims of coordinated actions by dairy processors.
“It’s very simple: there is supply and there is demand. Domestic milk consumption has fallen because millions of people have left Ukraine, while milk supply has increased. That’s the whole story. There is no need to talk about ‘cartels’ or ‘collusion’. There are years that favour producers, and there are years that favour buyers. Right now, it is the buyer’s year.”
Dudka also stressed that Ukraine should build a highly competitive agricultural sector while avoiding overreliance on agriculture alone.
“We should have an agricultural sector that is better than in the United States or the Netherlands. But we should not be only an agricultural country.”
When asked whether he would currently invest in expanding dairy production or purchasing more farmland, Dudka said he would choose land, describing it as the most valuable long-term asset for an agricultural business.
You can watch the full interview on YouTube
Source: Latifundist.com
