The total value of dairy exports in 2024 was estimated at €6.3 billion according to Bord Bia’s Export Performance and Prospects Report 2024-2025 published today, Wednesday, January 8.
This is in line with the dairy export value for 2023. There were over 1.6 million tonnes of product shipped to around 140 markets worldwide.
The biggest market for dairy exports was the EU, which took 38% of our exports (€2.4bn), followed by the UK which took 17% of our dairy exports valued at €1.1bn and then the US which accounted for 12% of our dairy exports (€750m).
According to head of dairy with Bord Bia, David Kennedy, 2024 milk collections in Ireland fell to approximately 8.3 billion litres, a decline of approximately 2.5% on 2023 levels, based on Central Statistics Office (CSO) data.
This is the second year Irish milk supply has declined since milk production quotas were lifted in 2015. Challenging weather in the spring and summer months limited grass growth during the critical ‘peak milk’ period and hampered production.
This was somewhat offset by mild, dry weather, which extended the grazing season later into September, October and November.
According to the Bord Bia report, high farm gate prices in the second half of 2024 motivated farmers to keep cows on lactation longer and drove strong milk supply over the final months of the year.
Dairy supply and demand
Growth in global milk supply in 2024 slowed by nearly 1%. Although New Zealand, the United States and Australia all increased output at higher rates, Europe struggled to deliver significant growth.
Of the top four European producers, only France increased supply; Germany, the United Kingdom and the Netherlands all remained flat or declined.
China’s rapid milk pool growth of recent years slowed in 2024 as smaller farmers struggled to turn a profit margin, according to Reuters. Global dairy import volumes grew marginally, estimated at less than 1% for 2024, based on StoneX data.
China saw its overall import demand fall 11% (or 14.5 million tonnes) on 2023 levels, yet remains the world’s largest dairy importer.
Mexico, the second-largest importer, reported flat to declining demand, while Algeria reduced imports by 15%, perhaps recalibrating after stockpiling during 2023 when commodity prices were more favourable.
On the positive side, demand in Southeast Asia was strong with Indonesia, Philippines and Thailand increasing their imported volumes by a combined average of 10%, according to the performance report by Bord Bia.
Butter
Butter exports grew by approximately €400 million or 31% in 2024 to €1.7 billion.
According to Eurostat, EU butter prices exceeded €7,800/t in October 2024, while averaging €6,360/t for the year to date. This was a sharp improvement to the average monthly price achieved in 2023 of €4,820/t.
The equivalent monthly average price quoted on SMP (skim milk powder) was just behind 2023 at €2,460/t. Cheddar prices averaged at €3,870/t up to October 2024, 7% below 2023 but trending upwards towards the end of the year.
In short, butter demand was the powerhouse behind dairy price increases in 2024, underpinned by lower EU production that fell more than 2% below 2023 levels, based on European Commission data.
Europe and North America are driving growth, accounting for over 80% of butter volumes exported. The more powder-dependent regions of Asia, Africa and the Middle East declined in 2024.
There were mixed fortunes in the UK, as the strong performance of butter was countered by volume and value declines across cheddar and spreads.
According to the Bord Bia report, this indicates challenges around retail affordability and increased third country competition as New Zealand filled its quota of 8,000t of cheese.
2024 was a year that gathered momentum as it progressed. The disappointment of a poor peak production period was somewhat alleviated in the late summer and early autumn as growing conditions and markets improved to deliver value back to farmers and processors.
Prospects for 2025
According to Bord Bia, uncertainty around the future of the nitrates derogation affects the mapping of potential milk production in Ireland.
The CSO reported that the size of the national dairy herd declined by 1.2%, or 22,000 head, between June 2023 and June 2024. The strong prices available in the second half of 2024 and the longer grazing season may, however, have slowed this trend into 2025.
Demand in Europe has been a key influence on Ireland’s export performance in recent years with regional self sufficiency remaining a key focus. The European Commission predicts that dairy cow numbers in Europe will decline marginally in 2025, but that higher yields will help maintain volumes.
The United States Department of Agriculture (USDA) expects that 2025 US milk output will ‘rise moderately’. The New Zealand 2024/2025 milk season has started at pace with collections running 5% cumulatively ahead of the previous year after three months.
On the demand side, GIRA Market Research is forecasting annual export growth volumes across the key categories over the next five years.
According to their Global Synthesis forecasts, cheese will see annual growth of 1.5%, solid dairy fats of 2.3%, and SMP of 2.2% each year to 2028. Demand for imported butter volumes is predicted to increase by 1.9% in the UK in 2025 and return to a modest growth in Germany of 1.7%.
Per capita consumption of butter and cheese in the US is trending positively, with anticipated increases of 6% and 1% respectively.
Overall, 2025 looks to be a year of both challenge and opportunity for the Irish dairy industry, according to Bord Bia.
The report stated: “There is no doubt that challenges in global markets may create supply opportunities for Irish dairy, with potentially higher demand for sustainability credentials from ‘Blue Chip’.
“However, several factors may constrain growth. These include the trading uncertainty with a new administration in the US, the ongoing uncertainty around Chinese demand and its impact on global markets, and the lack of clarity regarding potential changes to the nitrates derogation in Ireland.
“On a positive note, the diversified nature of the Irish dairy industry in terms of product output and markets served – not to mention its agility and sustainable credentials – positions it well to navigate these factors and ensure that 2025 delivers commercially and environmentally, for both farmers and processors.”