EU Cheese Industry: Production and Exports Growth Drivers

According to the United States Department of Agriculture (USDA), global cheese production reached 21.98 million metric tons (mmt) in 2023, a slight 0.18% year-on-year (YoY) increase. The European Union (EU) emerged as the leading cheese-producing region, contributing 10.39 mmt in 2023, a 0.48% rise compared to the 10.34 mmt registered in 2022. The European Commission (EC) indicates that the top EU cheese-producing countries were Germany with 2.45 mmt (+0.82% YoY), France with 1.71 mmt (-1.15% YoY), Italy with 1.21 mmt (+0.83% YoY), Poland with 1 mmt (+5.26% YoY), and the Netherlands with 0.95 mmt (+1.06% YoY).

Figure 1: EU Cheese Production from 2019 to 2024

Projections suggest a continued expansion in EU cheese production, which is expected to reach approximately 10.42 mmt in 2024. This optimistic outlook is influenced by EU dairy processing industries prioritizing cheese production over butter and milk powders, especially as milk supplies decline due to diminishing cow numbers. This strategic shift by processors is driven by robust domestic cheese demand, which is expected to increase further alongside economic recovery, rising incomes, and a resurgence in the hospitality and tourism sectors to pre-COVID levels. Moreover, the decrease in demand from China for milk powders may incentivize European producers to shift their focus towards cheese production, potentially leading to increases in cheese exports and domestic consumption.

The EU is the world's largest cheese exporter. According to Eurostat data, EU cheese exports amounted to 1.383 mmt in 2023, a 3.67% increase compared to the 1.334 mmt registered in 2022, indicating a rebound after a three-year consecutive decline. The 2023 EU cheese shipments were predominantly destined for the United Kingdom (UK) at 427.48 thousand metric tons (mt), a 1.04% YoY rise. This increase in shipments to the UK helped offset the declines seen in exports to the United States (US) at 128.98 thousand mt (-1.96% YoY) and Japan at 102.08 thousand mt (-7.42% YoY). It is worth noting that the majority of EU cheese shipments are traded within EU member states, constituting approximately 76% of total trade and 44% of the total production.

Figure 2: Cheese Exports Within and Outside EU from 2019 to 2024

Projections suggest that EU cheese exports could exceed 1.4 mmt in 2024, a 1.23% YoY expansion. This positive forecast is driven by the anticipated global increase in cheese demand as economic conditions recover from the COVID-19 pandemic. Concurrently, UK importers are seeking cheaper EU products to offset their domestic cheese production exported abroad. This trend is expected to persist in 2024 as UK cheesemakers focus on export markets to achieve better margins. Specialty cheeses continue to enjoy popularity in global markets, contributing to the anticipated growth in exports in 2024.