Ukrainian cheese producers face difficulties

Ukrainian cheese producers are facing difficulties as milk prices have risen by 25% and selling prices for cheese have risen by an average of 10%, Infagro reports. The profitability of cheese production in Ukraine has dropped to a minimum.

December has always been characterized by an increase in cheese sales, and this trend continues in this war year, despite a decline in population and modest incomes.

According to analysts, milk prices rose by a quarter, while cheese prices rose by 10%, reducing business profitability to a minimum.

Experts see few ways out of this situation for producers. Increased prices may deepen competition with imports and lead to an increase in imports. Also, chains may refrain from purchasing expensive goods with an implicit prospect of selling them.

Experts also point to the possibility of reducing raw material prices by limiting cheese production. However, this option is probably less likely.

It should be noted that Ukraine imports most of its cheese from Poland (34%), Germany (18%), and the Netherlands (17%).

Infagro's forecasts indicate that after the borders with Poland are unblocked, imports of Polish cheese may increase.

In recent years, Ukrainian retail chains have been filled with imported cheeses, including Polish ones, which puts significant pressure on domestic cheese producers. Imported cheese is cheaper than Ukrainian cheese.

The high prices for Ukrainian cheese are due to the rising cost of raw milk. Decreased cow productivity and lower milk yields have limited the supply of raw milk, intensified competition among processors, and led to higher prices.