MWE: docker-compose.yaml with build arguments

docker-compose.yml

version: "3.9"

services:
  foo:
      build:
        context: .
        # dockerfile: Dockerfile # in case you were not using the default
        args:
            foo: "some foo!"
      image: foo-repro
      container_name: foo-repro

Dockerfile

FROM ubuntu

ARG foo="setme"

# Available at build time:
RUN echo foo=${foo} > foo

# Need to "convert" into environment variable so it's available at runtime:
ENV FOO ${foo}

CMD [ "sh", "-c", "cat foo; echo FOO=${FOO}" ]

Run with

docker-compose up