UK dairy product availability Q4 2024

Key trends

• Milk powders in excess for another consecutive quarter
• Increase in production and imports, coupled with lower exports, boosted cheese and butter supplies

UK milk deliveries in the fourth quarter of the calendar year 2024 amounted to an increase of 3,727m litres (4.4%) year-on-year. The spectacular growth in milk deliveries during the period was in response to high milk prices, lower feed costs and favourable weather conditions. Overall, the increase in milk deliveries boosted the production of all dairy products during the fourth quarter of 2024.

Supplies of cheese boosted by higher production and imports

Cheese availability improved in the fourth quarter. Both production and imports remained on the higher side lifting supplies. Notably, cheese imports from New Zealand picked up in 2024 following the trade deal, which increased by a whopping 185% (9600 tonnes) compared to 2023. However, most imports came from the EU followed by New Zealand. However, the pace of imports from New Zealand slowed in the fourth quarter compared to the previous quarter as cheese in the UK was price competitive.

Cheese production increased by 1% (1000 tonnes) and imports edged up by 3% (3000 tonnes). Exports also declined by 5% (3000 tonnes) during the period, thereby uplifting supplies. Good demand in the domestic market fuelled imports.

Butter supplies in positive territory

Butter production increased by 6% (3000 tonnes) year-on-year in Q4 as commodity prices eased on UK wholesale markets but remained at historically high levels. Higher production increases availability for exports but only if prices are attractive. Overall higher imports of 16% (2000 tonnes) coupled with slight increase of exports (400 tonnes) drove available supplies higher by 9% (4000 tonnes).

Falling exports add on to the supplies of powders

Milk powder production increased by 13% (3000 tonnes) in Q4 due to rising milk supplies in the UK. Imports also increased by 25% (1000 tonnes). At the same time exports fell by 32% (7000 tonnes) which, paired with production growth, led to an increase in available supplies of 11,000 tonnes. Globally, the biggest declines in exports were reported to the MENA, the EU and Sub-Saharan Africa. Geo-political tensions in the global market have also been impacting trade flows.

In the Asian region, demand from one of the major dairy importers, China, continued to be subdued following the challenges of surplus availability in the domestic market and a stagnating economy. Consumers continue to follow a cautious approach towards their spending. Volatility in exchange rates and uncertainty around the recent tariffs from Trump government pose challenges for exports. The ongoing China-EU trade war might see impacts later in the year.

1product availability is defined as: production + imports - exports

Milk deliveries are expected to continue the increase until the flush and likely boost the product supply pipeline. The current milk delivery suggests we could see increased production in the first half of 2025. However, whether this additional stock will pressurise commodity prices in the later half of the year will depend on the magnitude of milk supplies in the spring flush and consumer demand.

According to Rabobank, Chinese demand is expected to return to the market in 2025. Trade dynamics following the recent developments of US tariffs will remain key watchpoints coupled with outbreaks of Foot and Mouth disease on the continent. This will determine future supplies of dairy products in the market.