Overview of Spain's Dairy Industry
Spain holds a prominent position in the global dairy market, producing approximately 7 million tonnes of milk annually. This production is supported by a robust agricultural foundation, including about 800,000 dairy cattle.
Dairy Processing and Products
The Spanish dairy processing sector is highly developed, processing over 6 million tonnes of milk each year. Key products include approximately 320,000 tonnes of cheese and 100,000 tonnes of milk powder and whey. Prominent companies in the industry include Capsa Food, Innolact, Lactalis Iberia, Danone España, and Central Lechera Asturiana.
Export and Import Dynamics
Spain actively participates in international dairy trade, exporting about 400,000 tonnes and importing around 300,000 tonnes of dairy products annually. This trade balance underscores Spain's robust presence in the global market.
Key Market Events
The industry is witnessing several significant events. Milk deliveries are expected to grow by 0.4% in 2024. Capsa Food's acquisition of a 40% stake in Innolact reflects industry consolidation. Notably, Danone is relocating yogurt production to Romania, while Lactalis introduces sustainable packaging solutions. Galicia is projected to contribute 41.6% of the country's total milk production in 2024.
Industry Challenges
The number of dairy farms has drastically decreased from 145,000 in 1992 to just 9,500 in 2024, due to issues like lack of generational transition and insufficient rural support. The industry also grapples with production costs surpassing sale prices and declining sheep and goat milk deliveries. Additionally, unfavorable weather conditions and the bluetongue virus have led to a 2% decrease in milk production.
International Expansion and Sustainability
Amul has entered the Spanish market by launching fresh milk products 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 mechanisms like fixed-price contracts to prevent unfair trading practices. Cantabria has introduced subsidies to support local dairy farmers, focusing on terrestrial-based production by 2025. In contrast, Nestlé is contesting a 6.8 million euro fine related to a milk price-fixing cartel case. The sheep milk market faces a decline, 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, with a 76% decrease over two decades, impacting traditional cheese production. Galician farmers, key suppliers of milk, face challenges from rising costs and diminishing farm profitability, affecting Spain's overall dairy industry standing. The second-largest milk producer in Spain, Castilla y León, faces a notable production decline, contributing 382 million kilograms of milk, trailing only Galicia's 1,298 million kilograms. Nationally, the total stood at 3,154 million kilograms.
Product Diversification
Danone is expanding its offerings in Spain by entering the infant nutrition market with its Blédina brand, targeting children from birth to three years of age. Spanish industries are pressured to reflect the European dairy market's dynamism in their origin prices. The adjustments by Lactalis come at a time when average European dairy prices are rebounding, influencing Spanish industries. The Spanish food industry calls for negotiations to avoid losing access to the US market. The Spanish Federation of Food and Beverage Industries (FIAB) expresses rejection and concern over a proposed 30% tariff on European products.
In May 2025, the average price of cow's milk in Galicia was 48.8 cents per liter, falling below the national average of 50.1 cents/liter. This low pricing occurs against the backdrop of rising prices across Europe. The decline in profitability is affecting the production structure; in 2024, 359 farms closed in Galicia, and between January and April 2025, another 92 were lost.
Danone, originally founded in 1919 in Barcelona.
Modified: 2025/07/22