Global Dairy Market in 2024: Export Outlook and Opportunities

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Published Mar 15, 2024

The dairy export market outlook for 2024 exhibits a varied landscape, with projections indicating a rise in cheese shipments but a decline in powdered milk exports, driven by shifts in consumer demand. Notably, certain countries are poised to seize opportunities arising from competitors' challenges, enabling them to gain market shares. In the EU, cheese exports are expected to grow to 1.38 mmt in 2024, driven by increased global demand. Conversely, the US is expected to see a rebound in cheese exports to around 466 thousand mt, attributed to investments in processing capacity. New Zealand's cheese exports, although strong in 2023, are forecasted to decline in 2024 due to heightened competition from Australia and the EU.

Meanwhile, butter exports from both New Zealand and the EU are expected to decrease, influenced by exportable supply constraints and a shift in focus towards cheese production. Similarly, SMP exports in the EU and the US are anticipated to decline in 2024 due to reduced milk production and subdued demand from key markets. Additionally, WMP exports from New Zealand and the EU are expected to face challenges, including tighter supplies and weaker import demand, which are likely to impact export volumes in 2024.

Cheese Export Projections for 2024

According to the United States Department of Agriculture (USDA), cheese exports in the European Union (EU) reached 1.36 million metric tons (mmt) in 2023, a 1.42% increase from the 1.34 mmt recorded in 2022. European Commission (EC) data reveals that Germany emerged as the top cheese-producing EU country with 207.68 thousand metric tons (mt), a 5.44% year-on-year (YoY) increase, followed by the Netherlands with 193.08 thousand mt (-0.6% YoY), and Italy with 173.08 thousand mt (+1.93% YoY). Projections suggest that EU cheese exports are expected to reach 1.38 mmt in 2024, a 1.47% YoY growth, driven by an increase in global cheese demand. This surge is particularly fueled by rising imports in major markets such as China and the United Kingdom (UK), the latter actively seeking affordable EU products.

Figure 1: Dairy Product Export Volume by Top Exporters from 2022 to 2024

The USDA reports that cheese exports in the United States (US) totaled 430 thousand mt in 2023, a 4.67% decline from the 451 thousand mt recorded in 2022. The United States Dairy Export Council (USDEC) attributes this decrease in US cheese exports to sluggish demand from Japan and South Korea, alongside increased competition from the EU and New Zealand. Projections suggest that US cheese exports could rise to approximately 466 thousand mt in 2024, a 3.33% YoY increase. This expected growth is driven by substantial investments in expanding processing capacity to meet the rising domestic and global demand for cheese in 2024. Importantly, significant import demand is anticipated from Japan, China, Mexico, South Korea, and the Philippines.

New Zealand's cheese exports soared to 370 thousand mt in 2023, a remarkable 15% increase compared to the 340 thousand mt recorded in 2022. This substantial growth was fueled by an unexpectedly robust year for milk production, with a significant portion channeled towards cheese production amid heightened demand from Japan, China, and South Korea. However, forecasts suggest that cheese shipments could decline to around 370 thousand mt in 2024, a 5% YoY drop. This pessimistic outlook is primarily attributed to the anticipated rise in competition from Australia and the EU, which is expected to exert pressure on market share in key destinations such as China and Japan.

Butter Export Projections for 2024

According to the USDA, New Zealand's butter exports totaled 520 thousand mt in 2023, a 5.26% increase compared to the 494 thousand mt recorded in 2022. However, butter exports are anticipated to decline to approximately 480 thousand mt in 2024, a significant 7.69% YoY drop. This decline is attributed to relatively constrained exportable supplies in 2024, following a robust export performance in 2023.

The USDA reports that EU butter exports amounted to 285 thousand mt in 2023, a substantial 11.76% increase over the 255 thousand mt recorded in 2022. The EC highlights Ireland as the leading exporter with 93.28 thousand mt (+14.08% YoY), followed by France with 46.73 thousand mt (+0.45% YoY), and Denmark with 28.83 thousand mt (-5.37% YoY). Projections indicate that EU butter exports could decline to 275 thousand mt in 2024, a 3.51% YoY drop. This negative outlook is attributed to reduced production, as many producers have strategically shifted their focus to cheese manufacturing in response to high global demand. Furthermore, EU butter exports are expected to face stiff competition in 2024, particularly from New Zealand.

SMP Export Projections for 2024

According to the USDA, EU skim milk powder (SMP) shipments reached 815 thousand mt, a significant increase of 15.11% compared to the 708 thousand mt recorded in 2022. EC data reveals that France led the export market with 137.34 thousand mt (+6.85% YoY), followed by Belgium with 136.93 thousand mt (-4.77% YoY), and Germany with 105.51 thousand mt (+23.48% YoY). Forecasts predict that EU SMP shipments will decrease to 810 thousand mt in 2024, a 0.61% YoY drop. This decline is attributed to reduced milk production and subdued demand from Asia, prompting processors to redirect milk processing toward cheese production. Additionally, while China and Algeria are expected to remain significant export markets for EU SMP, higher milk powder production in China and import controls in Algeria are likely to limit shipment growth.

In the US, SMP exports reached 810 thousand mt in 2023, a 2.06% drop compared to the 2022 figure of 827 thousand mt. This decline can be attributed to weak demand from Southeast Asia. Nevertheless, US SMP shipments are expected to rebound in 2024, reaching approximately 838 thousand mt, a 3.46% YoY increase. This growth is associated with the anticipated rise in SMP production, which will ensure larger exportable supplies and facilitate recovery in shipments to price-sensitive markets in East and Southeast Asia.

WMP Export Projections for 2024

The USDA highlights that whole milk powder (WMP) exports in New Zealand amounted to 1.35 mmt in 2023, a 1.66% increase compared to the 1.33 mmt achieved in 2022. However, New Zealand’s WMP shipments are anticipated to reach 1.33 mmt in 2024, reflecting a drop of 1.85% YoY. This decline is attributed to the expected reduction in milk production due to the effects of El Niño weather patterns, resulting in tight exportable supplies. Additionally, forecasts foresee weaker import demand from China and stagnant demand from Algeria and Indonesia, which are expected to exert pressure on New Zealand’s WMP exports.

According to the USDA, EU WMP exports totaled 260 thousand mt in 2023, a 10.17% increase relative to the 236 thousand mt in 2022. This growth was primarily driven by increased purchases by North African countries and the UK. However, projections suggest that EU WMP shipments are anticipated to drop to 250 thousand mt in 2024, a 3.85% YoY decrease. This pessimistic forecast is attributed to anticipated stiff competition from New Zealand, which is seeking alternative export markets following reduced demand for WMP from China. Additionally, most EU processors are prioritizing cheese production over WMP due to demand shifts, a situation that is expected to result in limited WMP exportable supplies.