EU Butter Export Highlights:
EU Butter Export Highlights:
- EU butter production has remained fairly flat throughout the past several years, increasing by a compound annual growth rate of only 0.3% from 2000 – 2013. EU butter consumption has increased by a CAGR of 0.6% throughout the same time period.
- EU butter exports fell nearly 40% from 2000 – 2013, declining from 195,000 MT in 2000 (9.7% of production) to 120,000 MT in 2013 (5.7% of production). 2013 EU butter exports were approximately one third of the 2004 EU butter exports of 353,000 MT.
- EU butter export growth has been restricted due to a shortage of raw milk and milk fat availability, and higher relative butter prices in the European market.
- Conditions have turned more favorable for EU butter exports of late, with international butter prices converging and EU milk production increasing.
- EU butter prices have declined through the past several months, with May ’14 U.S. butter prices exceeding EU prices for the first time since October ’12.
- EU milk production has experienced 11 straight months of accelerating YOY production gains. Monthly deliveries have exceeded 5% YOY growth of late.
- The more competitive EU butter prices, coupled with increased milk production, have led to a recent increase in EU butter exports. Jan ’14 EU butter exports were up 10% YOY, and Feb ’14 EU butter exports were up 22% YOY.
- Sustained butter demand from Russia is expected to allow exports to continue to expand in the near future. Total EU butter production is expected to remain constant in the short run, and to increase in years soon after quota expiration, increasing butter export availability.
- Although the outlook for butter exports appears relatively less favorable than for other dairy commodities, given the assumed better competitiveness of other exporting countries in world markets, the EU Commission projects exports to grow and stabilize around the level of 185,000 tonnes by 2022, representing a CAGR of 5.6% from 2014 levels.