Global Dairy Market: Export Opportunity Analysis

Global Market Forecast

The dairy market was estimated to be valued at USD 673.8 billion in 2018 and expected to reach USD 1032.7 billion by 2024, at a CAGR of 8% during 2019-2024.

The market is segmented into the following product types: milk, cheese, butter, cream, yogurt, dessert, and more. The milk segment dominates the largest market share, followed by the butter and cheese segments. The fastest growth is expected to be witnessed in the yogurt and dairy desserts segments. MarketWatch reports, in the next five years, the growth of the market will be driven due to its rich source of nutrients, such as phosphorus, potassium, magnesium, riboflavin, calcium and vitamin A, D, and B12.

Export/ Import Analysis

Agri Exchange reports Germany to be the world’s largest exporter with 13% of the global exports, followed by Netherlands with 12.1% and New Zealand with 11.8%. Germany is experiencing the growing popularity of its dairy in the Asian- Pacific region, such as China and Philippines. On the other hand, German exports of dairy to European countries have been declining due to the increasing competition in Europe, especially in Netherlands and France. Germany is known to be the world’s largest producer and exporter of cheese, producing 2.2 million tonnes and exporting 1.2 million tonnes in 2017.

Germany is also the world’s largest importer with 10% of the global imports, followed by China with 7% and France with 5.9%. It mainly imports from neighboring counties, such as Netherlands accounting for 26.3% of its total imports, France accounting for 13.7%, and Austria accounting for 9%. As dairy consumption in Germany is expected to increase, its import is also expected to increase, especially among cheese and milk.

Global Growth Opportunity Analysis

Europe was reported to dominate the market, accounting for more than 50% of the global market, combined with the Asian-Pacfic region. Around 45 million metric tons of dairy consumption is expanding the European dairy market. Another factor is the advanced manufacturing technology which allows producing high-quality dairy for commercial business with a low emission of greenhouse gases. The largest dairy producer in Europe is Germany producing 31.1 billion kilograms of dairy, followed by France producing 23.7 billion kilograms and the United Kingdom producing 13.9 billion kilograms.

The Asia-Pacific region was reported to be the fastest growing region in the next five years, especially in Vietnam and China. China is the Asia-Pacific second largest dairy producer, following India, and expected to grow at a CAGR of 11.5%.  Research and Market reports the Asian-Pasific region is expected to surpass the United States and the Western Europe in the next five years. The increasing population, rising awareness of health/ medical benefits of dairy consumption, and growing economic growth play an important role in the growing dairy market in the Asia-Pacific region.

Trend Analysis

Dairy demand is significantly increasing on a worldwide scale. One of the factors is the increasing health/ medical benefit awareness of dairy consumption. It contains a variety of nutrients that help prevent cardiovascular diseases and strengthen bones. Other factors include the growing disposable incomes and changing lifestyles and consumer preferences for diet.

As consumer’s eating behavior shifts toward healthier eating habits, lactose-free (sugar-free) dairy products are expected to gain significant popularity, especially in the United States, Europe, and China, where more than 5%, 10%, and 90% of the population are lactose intolerant respectively. Mordor Intelligence reports the lactose-free dairy products are expected to grow at a CAGR of 7%. Drinkable yogurt is also expected to gain significant popularity, growing at a CAGR of 11.4%. The variety of dairy products will keep boosting the demand and the market of dairy.

The dairy market is currently experiencing higher prices due to the high demand for a low supply of dairy. As European countries struggle with the coronavirus, supply chains have been interrupted and distributors are looking to diversify their networks. With a diversified portfolio, a firm can protect itself from the risk imposed on them by factors such as the coronavirus.

United States Market Analysis

The United States was reported to be the world’s largest producer of dairy, producing 91.3 billion kilograms in 2019. Increasing health/ medical benefit awareness of dairy consumption and changing consumer preferences for diet will keep fueling the demand for dairy in the United States.

The U.S. dairy is consumed not only in North America but also around the world. The United States’ dairy exports include milk powder, butterfat, lactose, cheese and whey, which were valued at USD 6 billion in 2019. Its major buyers are Mexico, Southeast Asia, Canada, China and South America, accounting for around 67% of its total exports. The U.S. dairy export has increased by 19% during 2017-2019 and is expected to grow in the next five years. Major vinegar producing states are California, Washington, Idaho, New York, and Pennsylvania.

In 2018, the United States-Mexico-Canada Agreement (USMCA) was formed to facilitate and develop trades between these countries. Under the new trade agreement, Canadian 3.6% tariff will be removed from the U.S. dairy products; as a result, the exports of dairy products from the United States to Canada will be expected to grow significantly.

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Source: Statista, World's Top Export