EU Butter Production Set to Decline by 1% in 2024 Amid Milk Supply Constraints
Source: DairyNews.today
Butter production in the European Union (EU) is forecast to fall by over 1% in 2024, according to the latest USDA Dairy World Markets and Trade report. The decline is being driven by limited milk supplies, which have prompted dairy processors to focus on more profitable cheese production rather than butter and non-fat dry milk (NDM).
The downward trend in butter production was already noticeable in early 2024, with a 4% reduction compared to the same period in 2023. Key butter-producing nations—Germany, France, Ireland, Poland, and the Netherlands—are all expected to see decreases, contributing to an overall decline in EU butter output. These five countries account for approximately 75% of the region's butter production.
Domestic butter consumption within the EU is also projected to fall by 3% in 2024, as health concerns and changing consumer preferences push demand towards plant-based alternatives. The shift is particularly pronounced in Mediterranean countries, where olive oil remains the preferred choice over butter.
In addition to reduced production and consumption, EU butter exports are expected to decline, with forecasts pointing to a 4% drop year-over-year through May 2024. Tightening supplies and increased competition from global exporters have weakened the EU’s position in key markets such as the United Kingdom, the United States, and Saudi Arabia. With export volumes expected to fall to 280,000 tons for the year, the sector faces significant challenges in maintaining its competitive edge.
Higher farm-gate milk prices and constrained stock levels are likely to further impact the EU's ability to compete in the global butter market, signaling potential difficulties ahead for the region’s dairy industry.
Domestic butter consumption within the EU is also projected to fall by 3% in 2024, as health concerns and changing consumer preferences push demand towards plant-based alternatives. The shift is particularly pronounced in Mediterranean countries, where olive oil remains the preferred choice over butter.
In addition to reduced production and consumption, EU butter exports are expected to decline, with forecasts pointing to a 4% drop year-over-year through May 2024. Tightening supplies and increased competition from global exporters have weakened the EU’s position in key markets such as the United Kingdom, the United States, and Saudi Arabia. With export volumes expected to fall to 280,000 tons for the year, the sector faces significant challenges in maintaining its competitive edge.
Higher farm-gate milk prices and constrained stock levels are likely to further impact the EU's ability to compete in the global butter market, signaling potential difficulties ahead for the region’s dairy industry.
