Quick scan Polish Dairy sector
If you are interested in structure of dairy cattle farming and milk processing industry in Poland, milk production and prices, data on import and export of dairy products, as well as SWAT analysis of the sector and future challenges, please consult the Quick Scan of the Polish Dairy Sector. It included also a list and contact details of the largest dairy companies in Poland!
Poland is the 5th largest dairy producer and has the 3rd largest dairy cow herd size in the European Union. In 2019 Poland was responsible for 1,7% of global milk production and 8,5% of total EU-28 milk deliveries, just after the Netherlands, which accounted for 9,7% of milk deliveries.
The Polish dairy industry underwent a transformation after the accession of Poland to the EU (2004). The production of milk and dairy products became concentrated, which translated into economies of scale. In the years 2005-2019, the revenues of companies involved in milk processing rose by more than 90%.
Poland has good agro-climatic conditions for milk production and has price-cost competitive advantages. Currently, Poland has approximately 130.000 dairy farms with approximately 2,3 mln cows. Wielkopolska and Podlaskie are the two voivodships with the strongest presence of dairy production and processing facilities.
Poland is the 5th largest dairy producer and has the 3rd largest dairy cow herd size in the European Union.
In 2019 an upward trend in the production of milk was observed in Poland due to increased milk yield which compensated the decreased population of dairy cows. In December 2019, the total number of dairy cows was 2.164 thousand head and was 2,3% lower than the year before.
In 2019, an upward trend in consumption of dairy products was consolidated, and this was determined by the improved income situation of households and favorable price trends when compared to substitution food products.
However, raw milk production in Poland exceeds balance consumption by approx. 20% and a large part of it is sold as dairy products on external markets. Polish dairy exports have increased almost fourfold since Poland’s EU accession.
Poland is among top players in of the world cheese market. Only the United States, Germany, France, the Netherlands and Italy make more cheese. Polish dairy products are sold mainly to EU countries. However, due to growing demand for dairy products in Asia, the Middle East and Africa, Poland has recently substantially increased its exports of milk powder to Algeria and whey to China, Indonesia and Malaysia and exports of Polish cheese to Ukraine. In 2018 Poland doubled export of packed milk to China confirmed its main position among the players for this product.
Download Quick scan
For these, and much more data on the milk production and processing in Poland in 2019, check the Quick Scan of the Polish Dairy Sector, an initiative of the Embassy of the Netherlands in Poland (21st October, 2020).
Polish dairy sector after the first wave of pandemic
The milk market in Poland reacted to the coronavirus pandemic primarily by lowering the purchase prices of the raw material.
- Since February, the prices have been constantly decreasing. Only in July did this trend stop. This month, dairy plants in Poland paid an average of PLN 130.69 for 100 liters, ie. 0.5% more than in June and 0.4% more than last year. The drop in prices was mainly due to export restrictions, on which we are largely dependent - explains Dorota Śmigielska, a milk market analyst of the Polish Federation of Cattle Breeders and Milk Producers and vice-president of the working group "Milk and dairy products" at the Copa-Cogeca secretariat.
The pandemic has however rocked exports
The export of dairy products is very important for Poland because our level of self-sufficiency is 121%. We have to allocate over 20% to exports, of which over 74% are exported to the European Union countries.
As a result of the coronavirus pandemic, supply chains were suddenly disrupted, and some even broken, despite the EU having made green lanes at the borders through which agri-food products could move without problems.
- The closure of HoReCa, i.e. gastronomy and hotel industry, had the greatest impact. I know from representatives of some dairies that these plants had to switch very quickly from producing goods exclusively intended for this sector to wholesalers and retailers. Covid-19 has also disrupted supply chains to third countries, says the vice-president of the Milk and Dairy Working Group at Copa-Cogeca.
In recent months, as the price of milk has decreased, large farms have started to produce more raw material. Is milk consumption growing in Poland as well?
- Practically since 2005, we have observed an increase in the consumption of dairy products. In 2019, it amounted to an average of 227 liters per capita, including milk intended for the production of these products. Initial forecasts for this year are that it should remain at the same level. Unfortunately, it is still too small, which means that we have an overproduction of milk in Poland, says the analyst.
According to FAO forecasts, by 2029 milk production in the world will grow by 1.6% annually.
Milk production in the EU itself will also continue its upward trend, which will primarily include organic raw material. Currently, it is 2-3%.
- Consumers are more and more willing to reach for products with ecological or nonGMO label, and this trend is expected to intensify in the future. In the case of the cattle population in the EU, it will decrease, but it will increase in countries such as India or Pakistan, i.e. where we already have a lot of cows, but their productivity is low. In 2029, these two countries are to produce over 30% of the world's milk - notes Dorota Śmigielska.