Butter, dairy spreads and milk fats market in MERCOSUR

Earlier Report Observations

The butter, dairy spreads, and milk fats market in MERCOSUR expanded from 307 thousand tons in 2018 to 401 thousand tons in 2022. This growth was initially supported by a shift in consumer perception following scientific findings that saturated fat in butter was not linked to heart problems, boosting demand. The COVID-19 pandemic in 2020 further heated consumption due to new habits and emergency aid, increasing imports to meet domestic needs. In subsequent years, the launch of innovative products like lactose-free vegan butter and the official U.S. recognition of all dairy fat levels as part of a healthy diet continued to support market expansion.

By 2023, market growth stabilized at 405 thousand tons, reflecting a crisis in the Brazilian dairy sector driven by growing competition from Argentina and Uruguay. Rising imports, spurred by price differences, pressured local margins, while formula changes in dairy products—such as partially replacing milk with whey and vegetable fats—affected quality and consumer perception. Despite stabilized international butter prices, these internal challenges and structural shifts within the industry tempered the market's earlier momentum.

Production butter, dairy spreads and milk fats in MERCOSUR

In kind, 2017-2020, K t

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

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

MERCOSUR's production of butter, dairy spreads, and milk fats has grown for the third year in a row. In 2020, the region produced 399.7 thousand tonnes, marking a significant year-on-year increase of 10.4%. Looking at the period from 2017 to 2020, production rose by 27.4%, with an average annual growth rate of 8.4%.

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

In value, 2017-2020, M $ US

MERCOSUR's production value for butter, dairy spreads, and milk fats has declined for the third consecutive year. In 2020, the output was valued at 1,479 million US dollars, representing a decrease of 17.8% compared to 2019. Over the 2017-2020 period, production value fell by 29.6%, with an average annual decline of 11.0%.

Annual dynamics of production in MERCOSUR in value, 2017-2020, M $ US

Exports butter, dairy spreads and milk fats from MERCOSUR

Exports in kind, t

MERCOSUR's exports of butter, dairy spreads, and milk fats have increased for the third year in a row. In 2020, the region exported 33,150 tonnes, showing a substantial rise of 22.5% from the previous year. From 2017 to 2020, exports grew by 183.2%, with an average annual growth rate of 41.5%.

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

From 2017 to 2020, Russia, Morocco, and Egypt were the top destinations for MERCOSUR's exports in volume terms. Russia accounted for 59.3% of exports, Morocco for 3.9%, and Egypt for 2.2%. Together, these three countries represented 65.4% of total export flows.

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

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

Exports in value, M $ US

After two years of growth, MERCOSUR's export value for butter, dairy spreads, and milk fats declined. In 2020, exports stood at 122.6 million US dollars, down by 8.7% compared to 2019. Between 2017 and 2020, export value increased by 56.5%, with an average annual rate of 16.1%. The peak value was recorded in 2019 at 134.3 million US dollars, with the largest increase of 40.3% also occurring that year.

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

From 2017 to 2020, the leading destinations for MERCOSUR's exports in value terms were Russia, Morocco, and Iran. Russia accounted for 58.9% of export value, Morocco for 3.5%, and Iran for 2.0%. Combined, these three countries made up 64.4% of total export flows.

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

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

Imports butter, dairy spreads and milk fats to MERCOSUR

Imports in kind, t

The import market showed volatility during the observed period. Volumes peaked in 2017 and reached their lowest point in 2020, with a 3.2-fold difference between these years. In 2020, MERCOSUR imported 2,113 tonnes of butter, dairy spreads, and milk fats, down by 61.0% from the previous year. The largest increase occurred in 2019, at 73.0%.

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

From 2017 to 2020, imports of butter, dairy spreads, and milk fats into MERCOSUR were not heavily concentrated in a few key markets. New Zealand accounted for 17.5% of imports, France for 9.9%, and Denmark for 0.7%. Together, these three countries represented only 28.0% of total import flows.

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

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

Imports in value, M $ US

MERCOSUR's import value for butter, dairy spreads, and milk fats has declined for the second consecutive year. In 2020, imports amounted to 15.0 million US dollars, down by 54.7% from the prior year. Between 2017 and 2020, import value decreased by 57.7%, with an average annual decline of 24.9%. The highest value was recorded in 2018 at 41.4 million US dollars, with the largest increase of 16.9% also occurring that year.

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

From 2017 to 2020, the partner portfolio for imports in value terms was quite broad. New Zealand accounted for 18.3% of import value, France for 12.9%, and Denmark for 0.8%. Together, these three countries represented only 32.0% of total import flows.

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

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