EU butter production declines as herd sizes shrink
Production forecast to decline 2.1 million tons in 2024
28 December 2023
1 minute read
By: Butter production in the European Union is forecast to decline to 2.1 million tons in 2024, down 20,000 tons from 2023, as processors prioritise the smaller milk pool toward cheese production, according to a recent US Department of Agriculture (USDA) Global Foreign Agricultural Service (FAS) dairy market report.
Importing butter prices in 2024 are expected to dampen an expected shift away from butter production; however, domestic consumer preferences for healthier alternatives are expected to weigh on processors’ motivation to expand production.
In 2023, butter production from January through September was 2% higher year over year, despite the significant decline in butter prices globally. This trend is forecast to continue through the end of the year, resulting in an upward version to the previous production forecast, with butter production estimated at 2.1 million tons.
EU butter exports are forecast to decline 4% to 275,000 tons because of lower production and stronger export competition, particularly from New Zealand.
Butter prices bottomed out in September and are expected to stabilise throughout 2024; however, a price gap is beginning emerge with Oceania. In November, EU prices were $2.57/lb whereas Oceania prices were $2.25/lb. This wedge is expected to persist through the year, constraining prospects for further export growth in major markets in East Asia.
