Fluid milk production continued to decline in 2017, following the long-term trend of animal number reduction. This trend will continue into 2018 at a somewhat slower rate. Despite smaller total milk yields, Ukraine significantly increased exports of butter and NFDM at the expense of diverting raw milk supplies to butter and decreased domestic consumption. These exports are not expected to continue in 2018. In 2017, Ukraine is expected to become a net importer of hard cheese for the first time in its history. Overall dairy sector efficiency will likely improve due to increased investments in industrial milk production. Domestic demand has shifted toward cheaper products and remains stable. Exports of almost all processed dairy products to Russia stopped in 2014 and are not expected to recommence.