Dairy products in Israel: Ukraine sharply increases supplies to the expensive and closed market

Israel purchased Ukrainian dairy products worth $9.99 million from January to July 2026. By the end of the first four months, it was $4.61 million. So, only in May, June, and July, deliveries increased by about $5.38 million — more than half of the entire seven-month result.

On average, from January to April, Israel bought Ukrainian dairy products for about $1.15 million per month. In the next three months — almost $1.79 million. The pace increased by approximately 56%. And here the figure becomes more interesting than Israel’s place in the Ukrainian export ranking: overall, Ukrainian dairy exports decreased by 18% year-on-year from January to July, while the Israeli direction, on the contrary, accelerated.

Israel accounted for about 4.6% of all foreign exchange earnings from Ukrainian dairy exports during this period.

But $9.99 million by itself doesn’t explain much to the Israeli reader. Is it a lot or a little for the country? How much is the Israeli dairy market worth in general? What part of it is accounted for by imports? Who is already supplying dairy products here — and where does Ukraine stand among them?

For NANews — Israel News | Nikk.Agency Stas Shifer compared fresh Ukrainian statistics with data from the Israeli market and UN Comtrade. Here, it was necessary to do one important thing, without which a beautiful but false rating would result: to separate actual dairy products from eggs and honey. In the international commodity group HS04, all this is located nearby. Information as of August 12, 2026, Association of Milk Producers of Ukraine.

A market of 11.7 billion shekels: imports are noticeable, but Israel still feeds itself with dairy products

The Israeli milk and dairy products market is large even by the standards of a relatively small country. According to StoreNext, sales in the dairy category in 2025 reached approximately 11.7 billion shekels. Moreover, over several years, Israelis’ monetary spending on it increased by about a quarter, while the physical volume of sales increased by only about 3.4%. In other words, Israelis did not start eating a quarter more dairy products. They started paying much more for it. The dairy category accounts for about 14% of the food basket.

And this market is still very local. In 2025, Tnuva accounted for about 46.9% of sales, Strauss — 25%, Tara — 9.4%, Gad — about 6%. Together, the four manufacturers controlled approximately 87% of the monetary turnover of the category. This immediately puts imports in their place: foreign goods are visible in Israel, especially in butter and cheeses, but the basis of the dairy refrigerator is still formed by local companies.

But with the question “what is the market share of imports?” a statistical trap begins.

UN Comtrade shows that in 2025 Israel imported goods of the entire HS04 group worth $303.99 million. But HS04 is not only milk, butter, cheese, or yogurt. It also includes eggs, natural honey, and some other animal products. Therefore, these $303.99 million cannot be called the cost of imported dairy products.

Even if you specifically take the entire amount of $303.99 million as a deliberately inflated upper limit and recalculate it at the average exchange rate of 2025 — about 3.453 shekels per dollar — it will be approximately 1.05 billion shekels, or about 9% of the retail market of 11.7 billion. But even these “9%” cannot be called the market share of imports. Customs considers the cost of goods upon import, StoreNext — the final price at the checkout with logistics, importer work, distribution, and store markup. Moreover, within those $303.99 million, there are eggs and honey. The average exchange rate of 2025 was 3.453 shekels per dollar.

So the correct conclusion is less spectacular but honest: imports make up a smaller part of the entire Israeli dairy market, but its role varies greatly from category to category.

With butter, this is literally visible.

In 2025, 15.8 thousand tons of butter were sold in Israel. In the industrial segment, 59% of the butter was imported. A completely different picture is with table butter: 83% was produced in Israel, and in retail chains, local butter accounted for 74% of sales and imported butter — about 26%. The same “dairy market,” but the share of imports changes from a quarter to more than half, depending on what product and consumption channel is being discussed.

That is why one overall percentage for all dairy products is more likely to confuse than explain the situation.

Netherlands, Poland, France, Italy, Spain — and where is Ukraine among them

There is another problem with statistics. If you just open HS04 and list countries by total amount, Ukraine unexpectedly appears much larger than it actually is in dairy products.

In 2025, Israel imported HS04 goods from Ukraine worth $39.34 million. At first glance — a very serious result. But $22.31 million of this amount is eggs, another $1.35 million is natural honey. For an article about dairy products, both indicators need to be removed. After that, about $15.67 million of classic dairy products remain.

The same had to be done with other suppliers.

If, according to UN Comtrade data for 2025, eggs, honey, and other clearly non-dairy positions are removed from HS04, the top five major suppliers of classic dairy products to Israel are as follows: Netherlands — about $29.4 million, Poland — $27.7 million, France — $24.7 million, Italy — $23.7 million, and Spain — about $23.2 million.

Here it is clearly visible why data cleaning is important. The Polish indicator of the entire HS04 is $52.75 million, but almost $24.94 million of it is eggs. Spain’s total amount is $30.95 million, but $5.53 million is honey, and another $2.26 million is eggs. In Italy, out of $25.78 million, about $2.08 million also comes from eggs.

We deliberately do not assign Ukraine a number in the full ranking of Israel’s suppliers. To do this, each country must be recalculated equally, not just a few convenient competitors. But the scale comparison is already possible: about $15.67 million of Ukrainian dairy products versus $23–29 million for each of the five largest European suppliers. There is a gap, but it is no longer the difference between a large market and a statistical error.

And even more interesting is what makes up Ukraine’s $15.67 million.

In 2025, Israel imported from Ukraine concentrated or sweetened milk and cream for about $8.98 million. Butter and other dairy fats — another $6.12 million. Cheeses and curd products — about $572 thousand.

This results in a rather specific structure. Ukraine is not yet entering Israel primarily as a “country of cheeses.” The main money is in concentrated dairy products and fats.

And here lies the boundary between fact and assumption. The fresh $9.99 million for January–July 2026 is not broken down by product categories by the source. Therefore, it is impossible to take the structure of 2025 and automatically declare that the current surge was provided by butter or condensed milk. We do not know this yet.

We can say something else. Back in May, NANews wrote about Israel among the buyers of Ukrainian dairy products: for January–April, the amount was $4.61 million. Now — $9.99 million. The fact of acceleration has already been recorded; the content of this acceleration will become clear when more detailed product statistics appear.

For the Ukrainian producer, there is also an additional barrier.

Israel is not a market where it is enough to simply bring a cheap product. Food imports here are still associated with tariffs, quotas, and licensing. Even with free trade agreements, special conditions remain for agricultural products, and the state in 2026 continues to allocate quotas for the import of certain products at reduced or zero duty.

So the Ukrainian $9.99 million appeared not in a fully open market.

Why Ukrainian imports do not yet mean cheap butter in an Israeli supermarket

And here the story ceases to be only Ukrainian.

Israel has been trying for several years to answer an unpleasant question: if the local dairy market is so expensive and so concentrated, why not just open it wider for imports?

In 2026, this debate reached an attempt at a major reform of the dairy industry. The Knesset Research Center described the existing system as a combination of production quotas, a “target price” for raw milk, high import tariffs, and state control of part of consumer prices. The proposed reform was supposed to move away from part of centralized planning towards economic incentives.

The debate turned out to be so tough that the simple scheme “removed barriers — got cheap products” did not work. At the same time, the existing food import system has not disappeared: in 2026, the Ministry of Economy continues to allocate quotas that allow certain products to be imported duty-free or at a reduced rate.

And the case of butter is generally unpleasant for proponents of overly simple explanations.

After opening the market and lifting price controls, the cost of imported butter for the Israeli consumer did not fall. According to a review by the research division of the Ministry of Agriculture, cited by Calcalist, the price of imported butter rose from 37.6 shekels in 2021 to 65.5 shekels in 2025 — about 75%. At the same time, a significant part of the difference formed after crossing the border: the combined marketing margin of importers and retail increased to 32.3 shekels per kilogram.

This is precisely the piece of history that disappears if you only look at the export table.

The Ukrainian producer can offer Israel a competitive price. The Israeli importer can increase the purchase volume. The state can give a quota. But between the factory in Ukraine and the buyer’s refrigerator remain transportation, insurance, import procedures, kashrut, warehouse, distributor, and retail network. At what point in the chain additional competition will turn into a price reduction — and whether it will at all — export statistics do not provide an answer.

Therefore, the growth of Ukrainian supplies is important in a slightly different way. Ukraine adds another source of dairy products to Israel in a market where the state is trying to increase competition but simultaneously protects its own production and faces high concentration of local players. This is not a promise of cheap butter tomorrow morning. This is an expansion of the very possibility of choosing where to bring it from.

There is also a downside. If imports become too cheap or too large, Israeli farmers and processors warn of a threat to local production and food sustainability. This is precisely what the political conflict over the 2026 dairy reform was about. The Knesset recorded a dispute between the Ministry of Finance, which linked the existing system to high costs and limited competition, and industry representatives who feared the consequences of a sharp market opening.

Therefore, Ukrainian dairy products enter Israel at a rather unusual moment. The market of 11.7 billion shekels remains mostly local. In some categories, imports already account for a quarter of sales or even more than half of industrial consumption. Five major European suppliers have long divided a significant part of external supplies. And Ukraine, despite the war and more complex logistics, increased sales to Israel to almost $10 million in the first seven months of 2026 and accelerated sharply after April.

But the most interesting indicator will not appear today.

If May–July were several large batches, the pace will level out by the end of the year. If the increase in purchases continues, it will already be about a deeper change in the trade channel between Ukraine and Israel. And then the important thing will not be Ukraine’s next place in the ranking, but a much more practical question for the Israeli: what part of this growth will eventually reach the shelf — and will it ever affect the price.