russia’s Milk Paradox: Record Stocks and Rising Prices

russia’s raw milk market is undergoing a structural crisis. At the end of 2025, unsold product stocks in agricultural organizations reached 73.5 thousand tons – by 9% more than a year earlier. Production consistently exceeds processing capacity, but this does not hold back retail prices: milk prices rose by 19% over the year.

The main factor behind the crisis is shrinking demand. Real incomes have slowed down, and russians have switched to a mode of saving, choosing cheaper alternatives. It is this thrifty consumption model that is undermining the market from within: processors buy raw materials at low prices but include the increased cost in the final product, and russian dairy products lose out to imports in terms of price.

belarus is delivering a blow from outside. russia is receiving stocks of belarusian butter and cheese that could not be sold in 2025, with critical expiration dates and at dumping prices, which are ensured by the specifics of state regulation of the dairy industry in belarus. These imports are finally pushing domestic producers out of the market.

The consequences for the industry are devastating. Farms with low milk yields are already becoming unattractive to processors, forcing them to cut prices or close farms. Some producers simply dump their products.