Butter, dairy spreads and milk fats market in Canada

Earlier Report Observations

The Canadian butter and dairy fats market contracted slightly in 2019 amid softening demand and a decline in butterfat production, but it rebounded strongly in 2020. The COVID-19 pandemic triggered a surge in home baking, which increased butter demand by 12% and raised the total market volume to 255 000 t. Growth continued into 2021, supported by a significant increase in the butter support price implemented in February, even as the peak home-baking trend began to subside.

External shocks and policy shifts impacted the market thereafter. In 2022, the war in Ukraine disrupted global supplies of feed, fertilizer, and energy, elevating production costs. Concurrently, a change in milk allocation policy that increased incentives for protein over butterfat reduced focus on fat production. These pressures contributed to a market decline to 257 000 t that year.

Consumer preference for higher-fat products regained momentum by 2023, with marginal increases in demand for butter and cream. This was supported by greater butterfat production in the Western Milk Pool, helping lift the market volume to 265 000 t. The sustained demand for high-fat dairy led to a substantial increase in the national milk quota for butterfat by August 2024, despite ongoing industry challenges related to butterfat overproduction and supply management.

Production butter, dairy spreads and milk fats in Canada

In kind, 2017-2020, K t

Globally, Canada ranked as the 16th largest producer of butter, dairy spreads, and milk fats from 2017 to 2020.

Top producers of butter, dairy spreads and milk fats, 2017-2020

World map of production of butter, dairy spreads and milk fats, 2017-2020

In 2020, Canada produced 236.5 thousand tonnes of butter, dairy spreads, and milk fats, representing a year-over-year increase of 5.2%. Between 2017 and 2020, production grew by 8.7%, which translates to an annualized growth rate of 2.8%. The largest decline occurred in 2019, with a drop of 3.2%, while the largest increase was in 2018, at 6.8%.

Annual dynamics of production in Canada in kind, 2017-2020, K t

Exports butter, dairy spreads and milk fats from Canada

Exports in kind, t

The market showed an unstable trend throughout the period. Exports reached their lowest point in 2017 and peaked in 2020, with a 3.5-fold difference between these years. In 2020, Canada exported 4 120 tonnes of butter, dairy spreads, and milk fats, which is 155.9% higher than the previous year. The largest decline was recorded in 2019, at 21.2%.

Annual dynamics of product's exports from Canada in kind, 2017-2020, t

From 2017 to 2020, the United States and Australia remained the top markets for exports in volume, together accounting for 91.1% of total flows, while other partners played a supplementary role.

Structure of product's exports in kind by countries, 2017-2020

World map of product's exports from Canada in kind, 2017-2020

Exports in value, M $ US

Butter, dairy spreads, and milk fats exports in Canada increased for the third consecutive year. In 2020, Canada exported 15.0 million US dollars worth of these products, equivalent to a year-over-year rise of 66.8%. Over the period from 2017 to 2020, exports grew by 238.4%, with a compound annual growth rate (CAGR) of 50.1%.

Annual dynamics of product's exports from Canada in value, 2017-2020, M $ US

From 2017 to 2020, the United States continued to be the main market for exports in value terms, holding an 80.2% share of total flows, while the remaining volume was distributed across numerous other destinations.

Structure of product's exports in value by countries, 2017-2020

World map of product's exports from Canada in value, 2017-2020

Imports butter, dairy spreads and milk fats to Canada

Imports in kind, t

In 2020, Canada imported 23 126 tonnes of butter, dairy spreads, and milk fats, down by 4.5% compared to the previous year. Between 2017 and 2020, imports increased by 9.9%, equating to an annualized growth rate of 3.2%. The lowest volume was recorded in 2018, at 20 801 tonnes, while the highest was in 2019, at 24 226 tonnes. The largest increase occurred in 2019, at 16.5%.

Annual dynamics of product's imports to Canada in kind, 2017-2020, t

From 2017 to 2020, New Zealand and the United States were the dominant suppliers of butter, dairy spreads, and milk fats to Canada, together accounting for 92.5% of total imports in volume, with other destinations each holding relatively small shares.

Structure of product's imports in kind by countries, 2017-2020

World map of product's imports to Canada in kind, 2017-2020

Imports in value, M $ US

After two years of growth, imported volumes of butter, dairy spreads, and milk fats in Canada declined. In 2020, imports stood at 104.0 million US dollars, marking a drop of 14.3% compared to 2019. Over the period from 2017 to 2020, imports increased by 2.8%, with a compound annual growth rate (CAGR) of 0.9%. The highest value was recorded in 2019, at 121.3 million US dollars, and the largest increase was in 2018, at 13.6%.

Annual dynamics of product's imports to Canada in value, 2017-2020, M $ US

From 2017 to 2020, two markets—New Zealand and the United States—played the leading roles in imports in value terms, together taking 93.6% of total flows, while the rest was distributed among other destinations.

Structure of product's imports in value by countries, 2017-2020

World map of product's imports to Canada in value, 2017-2020