These 8 countries that produce the most butter in the world account for the greatest share of the global commodity output.
Latest data from the US’s Foreign Agricultural Service (FAS) show that the global dairy market will continue to face a few challenges. Low import demand, coupled with excess supplies will keep milk and dairy product prices at low levels. FAS also predicts that output of some dairy products such as skimmed milk powder and whole milk powder will suffer due to the Russian food ban of products from Western countries, and weak demand from China. Although butter has also been affected by Russian sanctions (last year Russia imported 38 percent less butter compared to 2014), it is expected that at the end of 2016 the commodity output will record two percent increase. In terms of export quantities, butter occupies the fifth place among dairy product.
Last year around 790,000 tons were shipped globally, which is a slight decrease compared to 2014. Among three major butter markets, EU, US, and New Zealand, only European countries recorded a significant rise in export in 2015, which is expected to continue to increase by 10 percent this year reaching 210,000 tons. Shipments to China and Hong Kong greatly contributed to this rise, while the United States and Saudi Arabia have remained the main importers of EU butter. However, low domestic demand in EU states led to growing ending stocks last year. According to latest assessments, the product’s stocks have been declining at the beginning of 2016. After suffering a sharp decline of some 70 percent in butter export, the US is expected to recover in 2016 as a result of lowering prices which were kept well above global level during the last year. New Zealand also saw a decline in butter export due to lower demand from Saudi Arabia and China, which started to rely more on EU countries as suppliers.
Before we present you main commodity producers, let’s take a quick look at butter history and its modern usage. Butter, whose use dates back to the times when people first started to domesticate animals, was not only consumed as food, but it was also used as a beauty product and medicine. Our ancestors applied butter on the face to smother the skin. They also used it as a kind of gel to make their hair look shiny. Butter healing properties were exploited in cases of skin infections and eye problems. Finally, the commodity was included in religious ceremonies while Chinese saw it as an embodiment of Buda’s spirit.
Although in modern world butter is present in almost all cousins, the debate whether it is good or bad for health is very much alive. On one side there is a pile of studies claiming that butter decreases risks of cancer, arthritis, and osteoporosis. On the other, there is a prevalent belief that saturated fats in butter are bad for the heart. In addition, some studies have linked consumption of dairy fats with impaired cognitive ability. Although scientists cannot find common ground on whether butter is healthy or not, the majority of them agrees that moderate consumption can do no harm. So if you are a butter lover there is no reason why you should not treat yourself occasionally with blubbery butter cake or muffins. And while you eat this delicious dessert you can read our previous ranking of 10 countries that produce the most blueberries in the world.
In creating the list of 8 countries that produce the most butter we relied on FAS’s report about global commodity production. Since FAS groups EU countries as one entity, we also used Clal’s data about butter production in EU member states. Finally, information about butter export were found at Trade Map.
After gaining independence from communism in 1989, Polish industry, including dairy sector, has undergone major changes. In the last ten years dairy production and trade have seen accelerated growth and today the country is 6th largest milk producer in the EU. In 2015, production of milk in Poland increased by 2 percent, and it is expected that the positive trend will continue in 2016 as a result of growing demand for dairy products such as butter and non-fat dried milk. Since 2011 output of Polish butter increased by 33 percent. However, the growth was not followed by increased export. According to Trade Map, the country exported $123,642 of butter, which was some $25,000 less compared to previous year. The Czech Republic, Slovakia, and Germany are the main importers of Polish butter.
Latest archeological discoveries reveal that the Irish dairy industry dates back to 6,000 years ago. Its modern expansion began in mid 18th century in the Cork city which at the time was the world’s largest butter exporter. Today Ireland is known for its Kerrygold butter, which is a dominant brand in many foreign markets. In 2015, the country produced around 200,000 tons of butter. The greatest share was exported, while the United Kingdom, Belgium, and the Netherlands were main importers.
Last year, butter production increased by 5 percent in Russia. The growth did not compensate the loss, which market suffered after the country imposed a ban on food products from Western countries. Prior to the sanctions, Russian Federation imported large quantities of the product from EU states, while now it relies on Belarus as the main import destination. Overall take, imports of butter and butter oil decreased by 71 percent in the first half of 2015. At the same time, butter prices climbed 15 percent in 2015, and consumers started to turn to a cheaper alternative – margarine. Domestic demand for margarine led to a significant rise in the commodity production, and currently, Russia is the second-biggest producer of the spread. Finally, butter export fell by some 30 percent between 2014 and 2015, while Kazakhstan and Ukraine are leading importers of butter from Russia.
The fifth country on our list of 8 countries that produce the most butter in the world, is a home to largest dairy company Lactalis. Generating around 20 percent of the revenue of all industries, agrifood sector in France is one of the key drivers of the country’s economy. Besides meat processing, dairy product manufacturing creates the highest revenues. According to latest data, the dairy industry brought $27.6 million in revenue while employing around 55,000 workers. In the last five years the country increased the production of butter by 10 percent and it is currently the 2nd largest producer of the commodity in Europe. Since French eat the most butter in the world, only a small share of the commodity output is shipped to foreign countries. Between 2014 and 2015 the value of exported butter dropped by 17 percent, while Belgium and Italy were main importers. Moreover, France has been the largest importer of butter for years. In 2015, the country imported 559,079 tons of the commodity which was a decrease of some 30 percent compared to 2014.
Like in previously mentioned France, the agricultural industry is a strong pillar of the Germany’s economy. The sector, which is the fourth largest in the country, mainly relies on meat processing, dairy manufacturing and baked products. Between 2014 and 2015 butter production increased by 5 percent, but export value fell by 22 percent. In 2014 the country shipped 150,289 tons totaling $735,812 while last year it exported some 5,000 tons more whose value was $571,347. The Netherlands and France are the main importers of German butter with combined share of 30 percent of the commodity export. The most popular butter brand in Germany is Kerrygold, which is produced in previously mentioned Ireland. Finally, with 464,254 of imported butter, Germany is the second largest spread importer in the world.
3. New Zealand
Low milk prices on the global market have influenced milk and dairy production and export in New Zealand. The country was hit hard by excess in milk supply and reduction of prices because New Zealand, unlike the majority of other countries, processes more than 90 percent of produced milk into dairy products for export. Since the country does not have a stable domestic market which can compensate international price volatility, it is very sensitive to global changes. Between 2014 and 2015 butter export value dropped by 25 percent. In 2014, New Zealand shipped 306,694 tons totaling $1.1 million, while a year later export fell by 15,000 tons and it value was $881,332. China and Egypt are main importers of butter from New Zealand.
Between 2014 and 2015 butter production decreased by 1.4 percent in the US, while it is expected that the commodity output will record the growth of 2.4 percent in 2016. At the same time, the commodity export saw a sharp decline of 70 percent last year due to weak demand for US butter whose prices were above global level. Between 2014 and 2015 butter export value dropped from $285,855 to $91,654. Since the prices will go down in 2016, it is expected that the shipment will recover to 33,000 tons. Main export markets for America’s butter are Saudi Arabia and Canada. America is the only country in this ranking which saw a significant rise in imported butter. In 2014 the country bought around 70,000 tons of the commodity on the international market, while last year imported quantities reached 112,000 tons.
India ranks as first on our list of 8 countries that produce the most butter. The country is also the world leader in milk production (around 18 percent of the world’s milk come from India), as well as in milk and butter consumption. In the last five years, butter production increased by 16 percent, reaching 5,035,000 tons in 2015. Only a small share of produced commodity was exported since the county has a large domestic market with the total consumption of 5,026,000 tons.