Inside Business Dairy
Butter the black sheep in growing EU dairy exports
European exports of dairy products generally increased in the first quarter of the year. Both the export of cheese and milk powders has grown. Butter exports, on the other hand, have declined sharply. What's up with that?
Read this article?
Become a subscriber and get instant access
Choose the subscription that suits you
The European dairy market is in a good flow. Due to the weather conditions, milk production cannot match last year's level and therefore there is limited milk available. This has a positive impact on dairy prices, which have gone through a period of increase.
Not only is dairy available domestically, exports to third countries are also going well. European exports of dairy products increased in the first quarter. Both cheese and milk powders were exported more.
Growing exports
Figures from the European Commission show that Europe exported 3% more cheese in the first 5 months than last year. In total, almost 234.000 tons were exported. Japan has become the leading importer of European cheese over this period, importing 14% more cheese than last year. This amounts to a total import of just over 28.000 tons. The United States was number 1 on the list of main importers last year, but the Americans imported 16% less cheese. This makes the country the second largest consumer of European cheese.
Exports of skimmed milk powder also increased by 5% in the first quarter to more than 201.000 tons. China imported slightly more than last year and has become the main importer with a purchase of almost 26.000 tons. Algeria, on the other hand, imported less and purchased about 23.000% less at 31 tons than last year.
Butter exports are falling sharply
However, butter exports were an exception in the overall optimistic picture. 13% less European butter was sold than last year. In total, more than 45.500 tons went to third countries. The decline comes from the first 2 months of the year, when exports were significantly below last year's level. There was a recovery in March and exports even exceeded last year's levels.
| Q1 2020 | Q1 2021 | %Difference | |
| USA | 8.083 | 7.437 | -8% |
| China | 2.325 | 5.394 | + 132 % |
| Saudi Arabia | 5.488 | 2.514 | -54% |
| South Korea | 1.959 | 1.898 | -3% |
| Taiwan | 1.490 | 1.746 | + 17 % |
| Singapore | 1.396 | 1.694 | + 21 % |
| Morocco | 4.455 | 1.668 | -63% |
| Egypt | 2.705 | 1.625 | -40% |
| United Arab Emirates | 2.198 | 1.277 | -42% |
| Japan | 1.652 | 1.273 | -23% |
| Serbia | 547 | 1.101 | + 101 % |
| Other | 20.154 | 18.216 | -10% |
| Total | 52.451 | 45.844 | -13% |
The fact that less butter was exported is partly due to the higher level last year. Due to the corona crisis, the catering industry closed its doors and much more butter was produced than there was demand for. This even led to a private storage scheme for butter, where large quantities were kept in stock. These stocks were later put on the market.
There is now absolutely no oversupply of butter and the supply is only limited. The DCA quotation for butter is above €4.100 per tonne and is therefore above the level of the past 2 years.