Butter exports from the European Union (EU) and the USA are expected to drop by 15% and 21% in 2025/26 compared to the previous year, according to a report by the US Department of Agriculture (USDA).
EU exports were forecast to decline from 265,000 tonnes to 225,000 tonnes in the period while US exports were expected to drop from 113,000 tonnes to 89,000 tonnes, the December “Dairy: World Markets and Trade” report said.
EU butter production is forecast to decline by 1% in 2026 due to reduced milk supplies and the prioritisation of higher-margin products like cheese by dairy processors, according to the report.
“Lower supplies and lack of competitiveness against US butter is likely to dampen EU export opportunities in 2026. As of November 2025, EU butter quotes were nearly 80% higher than the USA,” the USDA said.
“In 2025, the EU struggled to retain market share in two of its top five butter markets – Saudi Arabia and South Korea – a trend that is likely to persist into 2026.”
With New Zealand’s butter production forecast at 535,000 tonnes in 2026 – unchanged from the previous year’s volume – the country’s exports were forecast unchanged at 515,000 tonnes due to stable supplies.
The country’s butter exports for 2025 were revised upwards to 515,000 tonnes – 10% above 2024 levels – due to strong growth to China, the EU and Saudi Arabia.
“Competitive New Zealand butter prices in 2025, especially vis-à-vis EU butter, propelled shipments upwards. However, exports also declined to some large markets, including the USA, Thailand and Japan,” the report said.
Meanwhile, butter consumption in China was projected to increase by 3% in 2026 to 282,000 tonnes, following a forecast 9% increase in 2025. “China butter consumption in recent years was lifted by increasing use in bakery goods production and the rising popularity of tea and coffee shops,” the USDA said.
China butter imports were forecast to increase by 1% to 162,000 tonnes in 2026, with domestic butter production accounting for a larger share of consumption in the period.
“Industry reports indicate that producers favour a butter-plus-skimmed milk powder (SMP) production strategy over whole milk powder (WMP) production due to better returns, leading to expansion in domestic butter production,” the USDA said.
“The foodservice sector generally accounts for most butter import demand as many applications require the quality and characteristics of imported butter. New Zealand historically has accounted for over 80% of China butter imports.”
