Dairy Product Manufacturing in European Union 2026: Industry Statistics & Trends

The Dairy Product Manufacturing industry in the European Union processes raw milk into liquid milk, cheese, butter, milk powder, and whey for domestic and global markets. According to Eurostat's 2025 food chain data, EU farms produced an estimated 161.8 million tonnes of raw milk in 2024, with dairies processing the milk into 107.5 million tonnes of dairy products. The sector's processing output continues to shift toward higher-value goods like cheese, with the European Commission forecasting total EU cheese production to reach 11,460 thousand tonnes in 2026.

Industry snapshot

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What does the Dairy Product Manufacturing in European Union industry cover?

This industry encompasses the collection and processing of raw milk from cows, ewes, goats, and buffaloes into various fresh and manufactured products. Fresh products include liquid drinking milk, cream, and fermented milk products like yogurt, while manufactured products consist of cheese, butter, milk powders, and whey. Industrial outputs are primarily traded within the EU single market as well as exported globally as key commodities.

• •Dairies processed raw milk into an estimated 107.5 million tonnes of dairy products in 2024 (Eurostat 2025).
• •Fresh products made up 21.9 million tonnes of drinking milk and 15.4 million tonnes of other fresh products in 2024 (Eurostat 2025).
• •Manufactured items included 10.8 million tonnes of cheese and 2.3 million tonnes of butter in 2024 (Eurostat 2025).

Who operates in the industry and how is it structured?

The European dairy manufacturing landscape features a strong geographic concentration of production alongside localized specialization. Germany is the dominant processing hub, leading across major categories like cheese, butter, and drinking milk. Non-cow milk processing (such as ewe and goat milk) remains a regional specialty heavily concentrated within Mediterranean member states.

• •Germany accounted for 23% of cheese, 21% of butter, and 19% of drinking milk produced in the EU in 2024 (Eurostat 2025).
• •France and Ireland are major butter suppliers, accounting for 17% and 15% of the EU total in 2024, respectively (Eurostat 2025).
• •Spain led non-cow milk deliveries with a 25.0% share, followed by Greece at 20.8% in 2024 (Eurostat 2025).

What drives demand in the industry?

Industry demand is propelled by resilient domestic cheese and whey consumption, alongside steady international export demand for premium European dairy varieties. Conversely, traditional drinking milk demand continues its long-term structural decline, forcing processors to optimize milk allocation. Global price competitiveness relative to other international exporters like New Zealand heavily influences export volumes for milk powders.

• •EU domestic cheese consumption is forecast by the European Commission to rise to 9,920.4 thousand tonnes in 2026.
• •Cheese exports are projected to total 1,423.7 thousand tonnes in 2026, supported by demand from the UK and US.
• •Total domestic fresh dairy product consumption is forecast to contract further to 35,352.8 thousand tonnes in 2026.

Who are the notable companies in the industry?

The EU dairy sector features a mixture of large multinational cooperatives and massive corporate entities operating across borders. Companies compete heavily for raw milk supply from regional farmers while managing volatile farm-gate price fluctuations. Highly integrated operations allow these top tier entities to redirect processing capacities toward high-margin lines based on shifting market values.

• •Société Lactalis S.A. is a major global processing multinational headquartered in France with widespread EU manufacturing sites.
• •Danone S.A. operates heavily across the EU food chain, specializing in fresh dairy products and fermented goods.
• •Glanbia plc is an international dairy and nutritional ingredients company based in Ireland with public stock exchange listings.
• •Kerry Group plc processes significant volumes of milk and dairy derivatives for the food ingredients market from its Irish base.

What are the recent trends and outlook?

The industry's near-term outlook is characterized by a shrinking EU dairy herd that is offset by rising yield efficiencies per cow. Processing trends continue to tilt decisively toward cheese and whey products at the expense of whole milk powder, which faces soft international demand. Profit margins are being squeezed by declining farm-gate prices relative to high inputs for energy and fertilizers.

• •The EU dairy herd is forecast to contract by 0.9% in 2026 to 18.6 million heads (European Commission 2026).
• •Average EU farm-gate milk prices decreased to 42.8 cents per kilogram by April 2026 (European Commission 2026).
• •EU milk yields are forecast to increase 1.1% to reach 8,359 kg per cow in 2026, lifting total cow milk production to 158.3 million tonnes.

How is the industry regulated?

EU dairy manufacturers operate under strict oversight from the European Commission regarding market standards, food safety, and environmental quotas. Industry representations are actively co-managed through institutions like the European Dairy Association (EDA), which participates in the Milk Market Observatory. Compliance focus has increasingly pivoted toward sustainable packaging directives and animal welfare frameworks.

• •The Milk Market Observatory, established in 2014, provides strict tracking of production and pricing metrics for compliance and stabilization.
• •Manufacturers are subject to the Common Agricultural Policy (CAP) parameters governing rural funding, cross-compliance, and sustainable farming practices.
• •Trade terms and protections for registered geographic dairy indicators are shaped directly by EU trade frameworks such as the EU-Mercosur agreement.

Government, statistical and trade sources used for this Claight analysis.

• Eurostat Key Figures on the European Food Chain 2025 Edition ·
• European Commission Short-Term Outlook Spring 2026 ·
• European Commission Milk Market Situation Factsheet 2026 ·
• FoodDrinkEurope Data & Trends Report 2023