Why does dairy trade matter?
Milk is the most significant agricultural product sector in terms of value and represents approximately 15 % of agricultural production in the EU. With a milk output of some 160 million tonnes, the EU is the number one milk producer in the world. An equivalent of about 1/3 of European milk production is being traded within the EU internal market in the form of various dairy products, such as milk, cream, butter, cheeses, milk powders, whey derivatives and casein. The EU exports some 12% of its production, making it a major player on the global dairy market and the top global exporter of many dairy products, such as cheeses, skimmed milk powder (SMP) and whey powders. Both EU production and exports of dairy products are expected to continue their increase in line with the growing global demand.
With its impressive list of components milk is probably the richest and most nutritious raw material available to the food and feed industry. It offers a wide range of proteins with different properties, has a complex fatty acid composition, is rich in minerals and vitamins and contains a specific carbohydrate: lactose. Milk is a complex product that can be processed into an enormous variety of dairy products ranging from consumer products (drinking milk, cream, yoghurts, butter and cheeses) to ingredients for the food industry (in dairy products, infant formula, chocolate, confectionery, pizza, ready-to-eat foods etc.) with different compositions and applications.
Matching supply with demand for all dairy products and ingredients is a gigantic challenge for the dairy sector. In order to deal with the complex dairy supply chain, the European industry relies on the expertise offered by its trading community. Whether on the sizeable internal EU market or the world market, dairy traders have always been at the forefront in ensuring that dairy products find buyers effectively and efficiently. Traders provide a variety of services to the market place, including market knowledge, technical expertise, tailor made products, customs and logistics, financial services and risk management. This involvement helps securing value for all participants in the supply chain and reducing price volatility.