Built to Export, Priced to Lose?

Last week was, yet again, another exercise in market mood swings: volatility, confusion, mild schizophrenia, and the usual heated WhatsApp group debates. Zooming out, dairy commodity prices have quietly shaved off 2–3% of their value over the past two weeks. Butter lost roughly €250/mt, cheese gave up around €150/mt, and powders—never one to miss a party—dropped just under €100/mt.

Milk production in the EU? The so-called spring flush hasn’t quite lived up to expectations. Let’s just say, it’s more of a drizzle. Dutch milk production seems to be improving a good bid with March volumes only 0.4% on 2024. But we dont see a big surplus EU wide yet. Favarable weather conditions might improve our outlook a bit. Demand, meanwhile, isn’t exactly roaring either. But the real pressure is creeping in from the export (and import) side. The recently imposed US tariffs have thrown a wrench into global trade, slowed export volumes, and—unsurprisingly—softened the USD, making American products cheaper and ours just that little bit harder to move.

This time no look at the EU day tot day market as we see buyers and sellers less and less convinced that taking action in such a unpredictable environment is wise. But we look at the EU export exposure risk. So, how dependent is the EU on exports, really? And which countries are pulling the most weight?

2023 EU Dairy Production vs. Export Volumes

We spent some time over the weekend digging through the data (don’t worry, we had coffee). With 2024 figures still patchy, we relied on solid 2023 stats for a more consistent picture:

Commodity	Total EU Production (MT)	Exports (MT)	% Exported	Top 5 Destinations
Cheese	10,600,000	1,379,100	13.0%	UK (110,569), US (54,241), Japan (53,909), Switzerland (34,369), South Korea (30,869)
Butter	2,300,000	249,102	10.8%	US (59,859), UK (47,806), Saudi Arabia (16,182), China (13,983), South Korea (11,714)
SMP	2,900,000	775,443	26.7%	Algeria (137,251), China (136,947), Indonesia (105,512), Nigeria (100,068), Philippines (94,263)
WMP	2,900,000	260,327	9.0%	Algeria (74,018), Nigeria (34,446), China (32,111), Oman (29,445), Saudi Arabia (25,754)
Whey	2,900,000	680,310	23.5%	China (140,607), Indonesia (118,773), Vietnam (110,714), Malaysia (89,381), Thailand (80,592)

Clearly, SMP and whey are our "get-it-out-the-door" products—more than a quarter of production is shipped abroad. Compare that to WMP or butter, and you see where we’re most exposed. For context: in 2015, cheese exports were just 8% of EU production; butter export was a modest 5%. So yes, the EU has become more outward-looking—perhaps a bit too much.

Butter: Looking West—and Holding Breath

In 2023, EU butter exports to non-EU countries hit 249,102 mt. The big five exporters? Ireland (91,598), France (46,725), Denmark (28,383), Netherlands (23,992), and Belgium (15,399). Nearly 40% of EU butter is bound for the US and UK—so currency volatility and trade policy tantrums in these regions matter more than we’d like to admit.

Top Butter Export Destinations (2023)

Rank	Country	Volume (mt)	Key Exporters
1	UK	46,545	Mainly Ireland (32,435)
2	US	44,990	Ireland (38,522), France (2,521)
3	Saudi Arabia	16,184	Denmark (3,079), Netherlands (784)
4	China	14,041	Germany (3,732), Netherlands (3,313)
5	South Korea	11,739	France (6,477), Poland (1,944)

Add in a colorful mix of destinations like Bahrain, Israel, and Singapore, and EU butter ends up on plates across the globe—but make no mistake: it's the English-speaking world that sets the tone.

Cheese: UK and US Rule the Roster

Cheese exports tell a similar story. Out of 1.3 million mt in non-EU shipments, about 40% goes to the UK and US. But interest from Asia—especially Japan and South Korea—is steadily growing.

Top Cheese Export Destinations (2024)

Rank	Country	Volume (mt)
1	UK	432,820
2	US	126,489
3	Japan	101,880
4	Switzerland	71,220
5	South Korea	53,909

Gouda Focus (2023):

Total exports: 141,243 mt
Top exporters: Netherlands (85,649), Germany (35,474), Denmark (3,174)
Top destination: Japan (34,611 mt). Yes, Japan. Not the UK. Not the US.

Mozzarella, on the other hand, is going on a honeymoon with South Korea:

Top Mozzarella Destinations (2023)

Rank	Country	Volume (mt)
1	UK	73,602
2	South Korea	41,030
3	Japan	18,642
5	China	8,972

A Decade in Cheese Exports to South Korea and Japan (2013–2023)

Year	South Korea (mt)	Japan (mt)
2013	20,000	85,000
2020	55,000	120,000
2023	53,909	101,880

South Korea is still on board, Japan is losing interest showing the EU cant keep expecting export to continue to grow.

Powders: Where the Real Volumes Are

📈 SMP

Strong demand from Algeria and Asia

2023 Highlights:

• Algeria: 143,288 mt

• China: 68,246 mt

• Egypt: 51,844 mt

📉 WMP

In decline. China’s self-sufficiency and NZ’s aggressive pricing haven’t helped.

2023 Highlights:

• Algeria: 25,835 mt

• China: 14,149 mt

• Nigeria: 13,784 mt

🟰 Whey

Plateaued. Strong in feed and fitness, but growth is over.

2023 Highlights:

• China: 201,759 mt

• Indonesia: 73,198 mt

• Malaysia: 71,460 mt

Currency Shifts: When Dairy Becomes a Forex Game

With the latest developments on the world stage where some friendships are lost and newones are made, currency shift are getting more and more important to look at. Because;

🇺🇸 Weaker USD:

• Makes US butter and cheese more attractive in Asia and MENA.
• EU exports to the US (~13% of cheese and butter) now face margin erosion—or worse, outright replacement.

🇬🇧 Weaker GBP:

• The UK is still our #1 customer across most categories.
• But if sterling stays soft and NZ/AUS continue tariff-free access post-Brexit, expect EU product to lose share—especially in value segments like mozzarella and cheddar.

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Where the EU Is Most Exposed

We tried taking a look on where the EU is most exposed to loosing some export volumes.

Product	% Exported	Key Risk
Cheese	13%	UK (31% of all cheese exports), GBP volatility
Butter	11%	US + UK = ~37%, tariffs + forex
SMP	27%	High exposure to MENA/Asia, price competition
WMP	9%	Demand decline, competition
Whey	24%	Asia-bound, saturation risk, US competition

Forward View (Q2–Q3 2025):

🧈 Butter

• Exports soft,
• Domestic demand flat
• Seasonal supply rising.
• Low stocks get replenished fast
• Imports are landing, supplying export-orientated factories like bakeries

📉 Outlook: Bearish unless tariffs vanish or demand surprises.

🧀 Cheese

• Gouda under pressure (Japan, UK, US exposure).
• Mozzarella facing competition from US and Oceanea exporters

📉 Outlook: Slightly more Bearish

🥛 SMP

• Demand is steady in Algeria, Asia.
• NZ/US pricing is the threat.

📈 Outlook: Stable, possible upside if Asia reorders.

🟫 WMP

• Demand poor, competition fierce.

📉 Outlook: Bearish.

🧪 Whey

• Animal feed, wellness trends keeping it afloat.
• No real growth left.

📉 Outlook: Flat to bearish.

Final Thought:

The EU dairy market is entering what can only be described as a currency-sensitive chess match. Margins are thinning, trade alliances shifting, and buyer loyalty is, as always, up for auction. Powder looks like the most defensible ground—everything else? Hope you like tight spreads and longer sales cycles.