Overview of Spain's Dairy Industry
Spain significantly contributes to the global dairy market, producing approximately 7 million tonnes of milk annually. The industry is supported by around 800,000 dairy cattle, with a strong emphasis on quality, tradition, and innovation.
Dairy Processing and Products
The Spanish dairy processing sector handles over 6 million tonnes of milk each year. Key products include about 320,000 tonnes of cheese and 100,000 tonnes of milk powder and whey. Major companies in this sector are Capsa Food, Innolact, Lactalis Iberia, Danone España, and Central Lechera Asturiana.
Export and Import Dynamics
Spain is active in international dairy trade, exporting approximately 400,000 tonnes and importing around 300,000 tonnes of dairy products annually. This trade balance showcases Spain's robust presence in the global market.
Key Market Events
Several significant events are shaping the industry, such as a projected 0.4% growth in milk deliveries by 2024. Notably, Capsa Food acquired a 40% stake in Innolact, Danone is relocating its yogurt production to Romania, and Lactalis is introducing sustainable packaging. Galicia is expected to contribute 41.6% of Spain's total milk production in 2024.
Industry Challenges
The number of dairy farms has drastically reduced from 145,000 in 1992 to just 9,500 in 2024, due to generational changes and insufficient rural support. Additionally, the industry faces challenges with production costs surpassing sale prices and declining sheep and goat milk deliveries. Adverse weather conditions and the bluetongue virus have led to a 2% reduction in milk production.
International Expansion and Sustainability
Amul has entered the Spanish market through a partnership with Cooperativa Ganadera del Valle de los Pedroches (COVAP). More Holstein Farm in Valencia, a Danone supplier, has achieved a 26% reduction in its carbon footprint since 2018.
Regulatory and Support Measures
Spain's regulatory framework includes fixed-price contracts to prevent unfair trading practices. Cantabria has introduced subsidies to support local dairy farmers, focusing on terrestrial-based production by 2025. Nestlé is contesting a €6.8 million fine related to a milk price-fixing cartel case. The sheep milk market is declining, with prices dropping by more than 21% from April 2024 to April 2025, leading to reduced production.
Regional Insights
The Valencian Community has seen a dramatic reduction in sheep farms, impacting traditional cheese production. Galician farmers face challenges from rising costs and diminishing farm profitability. Castilla y León, the second-largest milk producer in Spain, has a notable production decline, contributing 382 million kilograms of milk, compared to Galicia's 1,298 million kilograms.
Product Diversification
Danone is expanding into the infant nutrition market with its Blédina brand. Spanish industries are pressured to reflect the European dairy market's dynamism in their origin prices. The Spanish food industry calls for negotiations to avoid losing access to the US market due to a proposed 30% tariff on European products.
Economic and Social Impact
In May 2025, the average price of cow's milk in Galicia was 48.8 cents per liter, below the national average of 50.1 cents/liter. Rising costs across Europe are affecting profitability. In 2024, 359 farms closed in Galicia, with another 92 closures between January and April 2025.
Special Focus
Danone, founded in 1919 in Barcelona, plays a significant role in the industry. Cheese expert Clara Diéz highlights the potential of matured cheeses for lactose-intolerant consumers, emphasizing the importance of traditional cheeses in Spain.
Conclusion
The dairy industry in Cantabria faces a critical moment with the loss of 400 dairy farms. The sector is experiencing a significant decline due to low profitability, generational shifts, and excessive bureaucracy. The Spanish market remains diverse, with leading brands like Central Lechera Asturiana and Pascual, committed to tradition and innovation. Castilla y León is re-evaluating its ovine sector to boost efficiency and profitability, generating over €500 million in economic value in 2022.
A Milk Brand Is Banned Due to Commercial Conflict
Central Lechera Asturiana has been banned from Alimerka supermarkets due to a commercial disagreement, affecting farmers and consumers. The Spanish Supreme Court upheld a €6.86 million fine against Nestlé for involvement in a milk cartel, highlighting the need for transparency and fair competition. The province of León experiences a significant rise in sheep and goat milk prices, indicating strong demand and the significance of small ruminant production in this region. Spain's primary dairy region is facing economic concerns. Milk producers in Galicia, Spain's principal dairy region, are encountering significant challenges due to declining milk prices. This market volatility threatens both regional and national economic stability, impacting production, competitiveness, and employment, which are pivotal to national food security.
Modified: 2025/08/12