An econometric look at why milk and dairy prices hold a deterministic, seasonal rhythm over two decades — while competition between households and enterprises keeps the market in balance despite war, crises, and seasonality.
Due to Ukraine's climatic and geographical features, agriculture makes a relatively significant contribution to the country's gross domestic product compared to other industries. At the end of 2023, this sector accounted for 8.5% of total GDP, ranking fourth after the processing industry, wholesale and retail trade, and public administration. Agriculture, as a complex system, consists of several components: the cultivation of grain, industrial, fodder, and vegetable crops, fruits, berries, and other plant production; and livestock production.
Unlike other industries, which are less dependent on seasonal factors, agriculture is sensitive to environmental conditions and subject to the laws of nature and seasonality. Among the indicators of these influences, price is the most responsive in the Ukrainian market economy — it reflects production costs and also signals shortages, surpluses, or sufficiency of output, and responds to changes in population demand. The main principle of a market economy is equality among business participants and freedom of competition: both large and small farms or enterprises have equal rights to produce and sell. The way they balance the market is illustrated here through the dairy industry, which maintains deterministic price dynamics over a long period despite exogenous and endogenous influences.
The analysis used data from official statistical sources, including the State Statistics Service of Ukraine, the World Bank Data portal, FAOSTAT, and others. Specialized Python libraries and tools were applied for econometric modeling, mapping, spatial analysis, and forecasting.
Price is the most elastic indicator in the market — capturing costs, shortages, surpluses, and shifts in demand.
Agriculture answers to the laws of nature: harvest cycles, temperature, and daylight all leave their mark on prices.
Milk and dairy hold the steadiest, most predictable rhythm of all categories — the focus of this study.
Analysis of economic systems uses different approaches, chosen by the goal of the research. Across recent work, regression analysis is the most applicable approach, with price treated as one of the most representative indicators in the economy. Studies range across farms, industries, single economies, and the world — increasingly relying on machine-learning algorithms to process large data sets.
Internal grain prices form under the influence of world prices; weaker export ability and seasonal volatility negatively affect producers' profitability.
Elasticity of substitution between domestic and imported fruits, berries, and vegetables, and the effect of import growth on domestic prices and farm profits.
Lags in milk-price changes drive fluctuations in dairy-product prices; the model helped predict cost indicators.
Productivity dispersion within farms across 26 European countries, using production output plus weather and soil conditions.
Investment policy in dairy farms of transition economies (Estonia, Hungary, Slovenia); high discount rates raise dairy-farm sales.
Larger farms hold more resources for effective operation — a relationship drawn between farm size and productivity.
Digital technologies support stable, effective agriculture — but may be exclusive to small farms, risking inequality in development conditions.
Changes in product prices and quota restrictions may lead to expansion and strengthening of the milk industry.
Market structure and the EU unfair-trading directive: small firms dominate, yet greater productivity sits with large farms.
Macroeconomic volatility from EU accession and the single currency in five Eurozone members; the 2008 crisis disrupted dynamics.
Milk-cost fluctuations in France and Germany show asymmetric dynamics and sensitivity to external shocks.
Wars, pandemics, and bankruptcies — plus innovation, climate change, demographics, and globalization — drive structural shifts.
SVM, ridge/linear regression, and decision trees extract food-security factors; 104 indicators across political, military, economic, healthcare spheres.
Risks in agriculture shape food security over time and space; regional diversification and productivity play a leading role.
Regression and cluster analysis are frequently used in studies of agricultural growth stability.
Economic security is a key factor of competitiveness for farms — especially for countries facing military aggression.
Econometric study of the structure and dynamics of Ukraine's agricultural exports.
Optimization of logistics activities plays an important role for agricultural enterprises.
GDP, consumer, and oil-price fluctuations decomposed into trend, seasonal, and random components to improve forecasts.
A universal way to reveal cycles of ups and downs in business activity within economic systems.
FADN data on 4,500 crop farms across 24 European countries over 14 years; data aggregation determines result quality.
Labor-market data in Colombia: optimal model selected via component/regression analysis, neural networks, and SVM.
147 European agricultural companies: generalized least squares plus Bayesian networks link ESG investment to profitability.
Together these works reveal the complexity of economic systems and the range of characteristics for reconstructing their state and instability.
The purpose consists of several subgoals: examine the main trends in agricultural price fluctuations in Ukraine; study the dairy sector, whose prices stay deterministic despite destructive factors; and identify the causes behind these trends. Understanding sustainability in one sector may help improve others.
Reconstructed from average monthly agricultural producer prices, 2003–2023.
Animal numbers and milk volume studied to reveal milk-productivity trends over the years.
Output of dairy enterprises and farms analysed for their role in milk-market stability.
A spatial comparison of farm and enterprise contributions across the regions of Ukraine.
State Statistics Service of Ukraine, World Bank Data, FAOSTAT, and other official sources.
Average prices across seven product categories over 252 months from 2003 to 2023.
Specialized Python libraries for econometric modeling, mapping, spatial analysis, and forecasting.
Cereals & legumes, oilseeds, potato, vegetables, cattle & poultry, milk & dairy, and eggs.
Over 2003–2023, prices oscillate in rhythms of ups and downs on a steadily rising trend, with clear annual seasonality. Vegetable prices swing the most; grain and oilseed dynamics are similar, with a sharp 2022 surge after the full-scale invasion. Milk and dairy show the narrowest range — changing without catastrophic declines or sharp rises.
Prices usually rise in spring; harvest volumes from July to October push producers to cut prices during harvest months.
The highest peak comes in mid-summer, when old stocks fall and fresh produce just begins to appear — then prices decline as harvest completes.
Cheaper in late winter and spring; meat is more caloric and in demand during the cold season, and spoils quickly, so prices rise in warmer periods.
Milk & dairy and eggs fall to their lowest at the end of summer — driven by warmth, longer daylight, fresh plant feed, and physiological cycles that lift productivity. Of all categories, milk shows the smallest amplitude and the steadiest dynamic over two decades.
Why is dairy so predictable? From 1990 to 2023, milk production declined in step with a shrinking dairy herd. Yet productivity per cow nearly doubled, even though profitability only turned reliably positive in the 2010s.
Modern animal-care technologies, high-quality feed, and improved living conditions lifted yield per cow from 2.87 to 5.49 tons. Even so, the profitability of the dairy business was not consistently high — it reached a stable positive trend only from 2012 (2.3%), rising to 20.4% by 2020.
Both large enterprises and individual households produce milk. The comparison uses end-of-2021 data — the most complete year, and the last before the full-scale invasion, allowing a reliable read under stable conditions. Until 2022, official statistics distinguished two groups (enterprises and households); from 2023, three (enterprises, farms, households).
It can be assumed that household activity prevented enterprises from monopolizing the market and dictating prices unilaterally. This competition helped the milk and dairy market avoid catastrophic fluctuations in producer prices — a key source of dairy's equilibrium.
Households' share of total regional milk productivity in 2021. Their advantage is strongest in the south-central and western regions; the highest contributions — over 85% — appear in Rivne, Lviv, Ivano-Frankivsk, Zakarpattia, Chernivtsi, and Odesa Oblasts. Crimea is conditionally marked 0%: under occupation, it could not provide representative statistical reporting.
A forecast of average dairy sales prices for 2003–2024 was built with a Fourier function applied to 252 months of data (Fig. 7). It points to continued steady growth amid seasonal fluctuations, with price growth anticipated in 2025 under similar conditions.
Seasonal price fluctuations reconstructed and projected from 252 monthly observations.
The expected trajectory: steady upward dynamics with the familiar seasonal rhythm preserved.
Specialists note falling domestic consumption and accumulating surpluses, plus war-related risks for domestic dairy.
By analysing price volatility, experts suggest mitigating further risks by improving relations between supply-chain partners — producers, manufacturers, retailers, and consumers. Mapping how that chain functions, and where it is weak or strong, could be the next stage of investigation.
Enterprises sell at higher prices while households supply more milk at lower prices. This competition partially establishes a balance in the milk and dairy market — protecting it and consumers from catastrophic fluctuations in production volumes and prices.
Across 2003–2023, different sectors show their own price oscillations — but the most stable, seasonal dynamics belong to milk and dairy, dearer in winter and cheaper in summer.
Long-term trends in animal numbers and milk production reveal a clear reduction in the dairy-cattle population over the decades.
Comparing efficiency, enterprises command higher prices while households deliver more volume at lower prices — two complementary roles.
Households make a significant, region-varying contribution to milk production; under similar conditions, a price increase is expected in 2025.
As cited in the original article. Statistical sources marked (in Ukrainian).