EU butter market analysis
The butter market analysis showed that butter has been one of the products with the steepest price increases recently. The average price of a kilogram of fresh butter with a fat content of about 82.5% was PLN 22.20 in 2021. Find out about the current situation in this market.
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How big is the global butter market?
The value of the global butter market was USD 18.4 bn in 2021. According to estimates, the global market is set to reach USD 27.8 bn by 2027, with annual growth of 3.9% between 2022 and 2027.
In 2020, 255 thousand tonnes of butter were produced. From 2004 to 2020, industrial butter production in Poland grew every year. 2021 was an exception: processing plants produced 6% less butter than in the previous year (232 thousand tonnes). However, according to Statistics Poland (GUS), 108 thousand tonnes of butter were produced in the first five months of 2022, 2% more than in the same period of 2021.
| Period | Production (thousand tonnes) | Change y/y |
|---|---|---|
| 2020 | 255 | – |
| 2021 | 232 | 6% less |
| January–May 2022 | 108 | 2% more |
02
How much butter does the EU produce?
In 2021 the EU produced 2,075 thousand tonnes of butter, with Germany (471 thousand tonnes), France (407 thousand tonnes) and Ireland (275 thousand tonnes) the largest producers.
In 2021, average butter consumption in the European Union was 4.34 kg per capita. In the same year, the EU produced 2,075 thousand tonnes of butter, 2.9% less than in the previous year. The largest producer is Germany (471 thousand tonnes), followed by France (407 thousand tonnes) and Ireland (275 thousand tonnes). Poland ranked 4th in butter production in 2021.
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| Country | Share (%) |
|---|---|
| Germany | 23 |
| France | 20 |
| Ireland | 13 |
| Poland | 11 |
| Netherlands | 7 |
| Belgium | 5 |
| Italy | 5 |
| Denmark | 4 |
| Other | 12 |
Butter prices in the European Union in mid-September 2022 were as follows:
Show chart data as a table
| Country | Price (EUR/kg) |
|---|---|
| France | 7.85 |
| Spain | 7.22 |
| Netherlands | 7.22 |
| Belgium | 7.21 |
| EU average | 7.16 |
| Germany | 6.97 |
| Poland | 6.84 |
| Czechia | 6.27 |
According to the retail price index, in August 2022 butter was 45.2% more expensive and margarine 58.4% more expensive than in August 2021. Prices rose mainly because of higher production costs, chiefly energy and labour costs.
03
How are butter exports and imports changing in the EU and Poland?
In January–June 2022 the EU exported 4% less butter than a year earlier, while Poland's butter and milk fat exports rose from EUR 67 m to EUR 152 m in January–April.
In January–June 2022 the EU exported 4% less butter than a year earlier. In the first half of 2022, EU butter exports increased to the USA (1%), Saudi Arabia (13%), South Korea (21%), Switzerland (38%) and the United Kingdom (86%). Exports to China fell by 31%.
| Destination | Change | Value (%) |
|---|---|---|
| USA | increase | 1 |
| Saudi Arabia | increase | 13 |
| South Korea | increase | 21 |
| Switzerland | increase | 38 |
| United Kingdom | increase | 86 |
| China | decrease | 31 |
In January–April 2022, the value of exports of butter and other milk fats from Poland rose from EUR 67 m to EUR 152 m. This is an increase of over 126%. In volume terms, sales abroad were 45% higher, at 26 thousand tonnes. In the first four months of 2022, the value of imports of butter and other milk fats also rose, from EUR 68 thousand to EUR 87 thousand. From January to April 2022, 14 thousand tonnes of these products were imported into Poland, a decrease of over 4 tonnes compared with the previous year.
| Indicator | Previously | January–April 2022 | Change |
|---|---|---|---|
| Exports – value | EUR 67 m | EUR 152 m | increase of over 126% |
| Exports – volume | – | 26 thousand tonnes | 45% higher |
| Imports – value | EUR 68 thousand | EUR 87 thousand | – |
| Imports – volume | – | 14 thousand tonnes | decrease of over 4 tonnes |
04
What are the threats to the butter market?
The main threat to the butter market is inflation, which drives up prices and lowers sales: between June 2021 and May 2022, butter sales fell by 14%.
The current situation in the market for butter and butter products points to falling sales in this segment. Between June 2021 and May 2022, butter sales fell by 14%, while sales of margarine and butter blends fell by around 8–9%. The main threat to the butter market is therefore inflation: it drives up prices, which leads to lower sales. For this reason, Poles are more willing to choose cheaper alternatives to butter, such as margarines or butter blends. Demand for plant-based food is also growing as consumers become more aware of animal welfare. The market for plant-based substitutes is developing rapidly. More and more people also believe that plant-based products are healthier and safer.
Author: Katarzyna Kucia
Sources:
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Source: MarketHub, "EU butter market analysis", markethub.pl, 10.2022