Butter, dairy spreads and milk fats market in South America

Earlier Report Observations

From 2018 to 2020, the South American market for butter, dairy spreads, and milk fats expanded from 435 thousand tons to 504 thousand tons in volume. This growth was primarily fueled by a shift in consumer perception after scientific findings dispelled concerns about the cardiovascular risks of saturated fats in butter, leading to a recovery of butter's popularity and increased demand, particularly for premium varieties.

The market's growth continued but slowed after 2020, reaching 543 thousand tons by 2023. The deceleration was influenced by a shortage of domestic butter in Brazil due to high consumption of whole milk, which reduced the supply of dairy fat available for butter production. Concurrently, a growing health and wellness trend in countries like Peru boosted demand for low-fat dairy products and plant-based alternatives, creating competitive pressure on traditional butter. In value terms, the market reached $3 117 million USD in 2022, partly driven by a sharp 122% price increase for butter in Brazil over six years, resulting from strong demand and constrained supply.

Production butter, dairy spreads and milk fats in South America

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

South America's production of butter, dairy spreads, and milk fats has grown for the third year in a row. In 2020, the region produced 524.9 thousand tonnes, marking a 10.2% increase compared to the previous year. From 2017 to 2020, production rose by 23.9%, with an average annual growth rate of 7.4%.

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

In value, 2017-2020, M $ US

In contrast, the value of butter, dairy spreads, and milk fats production in South America has declined for three consecutive years. In 2020, output was valued at 1 996 million US dollars, down 16.0% year-on-year. Between 2017 and 2020, production value fell by 28.6%, translating to an annualized decrease of 10.6%.

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

Exports butter, dairy spreads and milk fats from South America

Exports in kind, t

Exports of butter, dairy spreads, and milk fats from South America have increased for the third straight year. In 2020, the region exported 37 142 tonnes, a 25.1% rise compared to the previous year. Over the period from 2017 to 2020, exports surged by 147.1%, with a compound annual growth rate of 35.2%.

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

From 2017 to 2020, the main destinations for South America's butter, dairy spreads, and milk fats exports in volume terms were Russia, the United States, and Morocco. Russia accounted for 53.8% of exports, the United States for 4.6%, and Morocco for 3.4%. Together, these three markets represented 61.8% of total export flows.

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

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

Exports in value, M $ US

After two years of growth, the value of South America's butter, dairy spreads, and milk fats exports declined in 2020. Exports stood at 141.2 million US dollars, a modest drop of 4.6% from the previous year. However, from 2017 to 2020, export value increased by 42.3%, with an average annual growth rate of 12.5%. The peak value was recorded in 2019 at 148.1 million US dollars, which also saw the largest annual increase of 33.7%.

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

Between 2017 and 2020, Russia, the United States, and Morocco were the top markets for South America's butter, dairy spreads, and milk fats exports in value terms. Combined, they absorbed 60.7% of total export value.

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

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

Imports butter, dairy spreads and milk fats to South America

Imports in kind, t

Imports of butter, dairy spreads, and milk fats into South America have decreased for the third consecutive year. In 2020, imports totaled 16 521 tonnes, a slight decline of 7.9% compared to 2019. From 2017 to 2020, imports fell by 21.3%, with a compound annual decrease of 7.7%.

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

From 2017 to 2020, New Zealand, France, and the United States were the largest contributors to South America's butter, dairy spreads, and milk fats imports in volume terms. New Zealand accounted for 57.3% of imports, France for 4.2%, and the United States for 3.3%. Together, they made up 64.8% of total import flows.

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

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

Imports in value, M $ US

Imports of butter, dairy spreads, and milk fats into South America have declined for the second year in a row. In 2020, imports were valued at 84.3 million US dollars, down 10.9% from the previous year. Between 2017 and 2020, import value decreased by 23.6%, equating to an annualized drop of 8.6%. The highest value was recorded in 2018 at 143.6 million US dollars, which also saw the largest annual increase of 30.0%. In contrast, 2019 experienced the steepest decline of 34.1%.

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

Throughout 2017 to 2020, New Zealand, France, and the United States remained the key partners for South America's butter, dairy spreads, and milk fats imports in value terms. New Zealand accounted for 56.8% of import value, France for 5.5%, and the United States for 3.5%. Collectively, they represented 65.8% of total import flows.

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

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