Changes and trends in the Polish milk and dairy market

Poland is the 6th largest dairy producer and has the third largest dairy cow herd size in the European Union. According to Credit Agricole Bank, Poland has been one of the biggest winners in the abolition of quota’s in 2015. Of the ‘New-Member states’ (NM-10) to the European Union, Poland has had the biggest growth in milk production, up with 4% the year after the abolition of quotas, and the milk production has continued to grow (Sutenko, 2018)

Changes in prices and production between 2017 and 2018

The economic situation of the Polish milk and dairy market has remained good in 2018. Globally, prices for solid milk and dairy products were relatively high and even increased compared to 2017. Buy-in prices for milk stayed high in 2018, ensuring profits for dairy farms.

Since the dairy farms were more profitable, Poland’s dairy cattle population saw a major increase. In 2018, Poland had the biggest total increase of dairy cows in the EU-28, with an increase of 61,000 (2,8%) since 2017, reaching a total of 2.214.000 dairy cows. Poland has the third biggest dairy cow population in the EU, following Germany and France. Almost 10% of dairy cows in the EU are in Poland. Additionally, the average yield per dairy cow in Poland increased with 0,9%; to a total of 6258 liters per cow in 2018. Raw milk production in Poland reached a total of 13768 million liters, which is an increase of 3,3% compared to 2017. Furthermore, Poland saw an increase in the foreign trade of dairy products. Poland’s exports (expressed in raw milk equivalents) saw an increase of 9,7%, reaching a total of 4620 thousand tonnes in 2018 (CLAL, 2019).

In 2019-2020, it is estimated that the cattle population in Poland will continue to grow. The Polish dairy industry will continue to restructure, which will lead to a decrease in the number of suppliers and an increase in the average supply size per farm. This will result in a milk production of 14 to 14,3 billion liters in 2020.

Trends in consumption

In 2017, a downward trend in milk consumption was observed. This trend seems to have reversed in 2018. Especially outside the household, the consumption of dairy products grew. The consumption of dairy products within households remains similar to that of 2017. The average per-capita consumption of dairy products in milk-equivalents was 218 liters in 2017, which was a 2% decline compared to 2016, but increased with 2% over 2018 (Rucinski, 2018).

Modern dairy processing companies try to focus on one of the main trends, which is providing their customers with a well-balanced diet. The dairy processing companies try to accomplish this through producing healthy food in an environmentally-friendly way. Dairy companies can accomplish this through implementing innovative eco-friendly solutions for processing, energy management and marketing.

The Polish consumers’ awareness on GMO’s (genetically modified organisms) is constantly growing. There is a growing social pressure to clearly indicate which dairy products do not contain GMO’s. This lead to the decision of the Polish Chamber of Milk to establish a standard to allow dairies to obtain a certificate which confirms the milk is made without GMO ingredients.  The standard covers the whole chain of dairy products, from feed production, nutrition on the farm, dairy processors to producers of ingredients and additives, trade in dairy products or feed.

flags of the eu and uk

Effects from the Brexit

The United Kingdom is the fourth largest recipient of Polish dairy products, with a value of over 106,3 million euros in 2018. Polish products such as buttermilk, yoghurt, kephir and other soured milk drinks are mostly exported to the UK. The UK is Poland’s number one export country for yoghurt and sour milk drinks, with a value of almost 48 million euros in 2018. According to the Polish Minister of Agriculture and Rural Development, the Brexit could have a negative impact on both the Polish and British dairy sector, because there is a lot of uncertainty. For example, under a no-deal Brexit, there will be import tariffs on selected dairy products, border controls and custom procedures (AHDB, 2019).

Bibliography

  • AHDB. (2019). UK and EU import tariffs under a no-deal Brexit. Retrieved from https://ahdb.org.uk/uk-and-eu-import-tariffs-under-no-deal-brexit
  • CLAL. (2019, 7). POLAND: Quantity and milk quality | DairySheets. Retrieved from https://www.clal.it/en/?section=consegne_country&c=PL&a=2019&m=7&p=D1110D__THS_T
  • Forum Spoldzielcaosci Mleczarskiej. (2019). 17th International Dairy Forum.
  • Rucinski, P. (2018, 5 11). Poland: 2018 Dairy and Products Report. Retrieved from USDA: https://gain.fas.usda.gov/Recent%20GAIN%20Publications/2018%20Dairy%20and%20Products%20Report_Warsaw_Poland_11-5-2018.pdf
  • Sutenko, J. (2018, 3 13). Poland emerges a winner three years on from end of EU milk quotas. Retrieved from https://iegvu.agribusinessintelligence.informa.com/CO217137/Poland-emerges-a-winner-three-years-on-from-end-of-EU-milk-quotas