Covid-19: International dairy sector under pressure
25 Apr 2020The novel coronavirus crisis has shaken the entire food and beverage industry, but the dairy sector has been particularly hard hit as demand for many dairy products has evaporated. What happens next for the dairy industry?
Closure of the foodservice sector has had an especially significant impact on global dairy demand, although in many countries, increased at-home purchases of dairy products are helping to ease the overall pressure on supply chains.

In China, most butter and cream is imported, often for use in western-style products available in restaurants and foodservice, so the impact on first quarter sales has been felt strongly by suppliers in Europe, Australia and New Zealand. On a domestic level, too, UK dairy farmers have warned that the lack of dairy demand from foodservice could force them to cull cattle, while US dairy trade groups have estimated that supply exceeds demand by at least 10%.
European dairy farmers have called on the European Commission to activate voluntary production cuts across the region to safeguard prices, and to prevent producers from pouring away millions of litres of milk, while US dairy groups have called for government assistance.
Individual companies and farmer cooperatives already have taken their own measures to prevent long-term damage to the sector. Danish dairy group Arla Foods, for instance, has said it will prioritise products for everyday life at home, such as fresh dairy products, infant nutrition, cooking products, long-life milk, nutritional products for the medical sector, and milk powder for countries outside Europe. Meanwhile, Irish nutrition group Glanbia has said it has traded reasonably well because its main focus is on retail markets, and although getting products to many international markets has been difficult, this has been offset by higher demand in North America in particular.
Rabobank’s latest research note on the sector suggests that it will go through three distinct phases of market movement over the next year, from panic-buying, to lower retail demand and greater logistical challenges, to longer-term loss of consumer purchasing power. In the EU, some countries and products – like processed cheeses and mozzarella – are especially exposed to the closure of foodservice channels.
However, it added that there were reasons for the global dairy sector to be optimistic about a return to normal. China’s consumer buying patterns are likely to normalise by the second half of 2020, it said, and there are signs that this is already happening in some supply chains. The faster each country gains control of the pandemic within its own borders, the faster dairy demand will return across the board.
In the meantime, many larger dairy companies may be able to redistribute milk to long-life and retail products, but smaller companies with more limited product portfolios are likely to face greater pressure.
Related news

Boom or bust: Are consumers ready for the alternative protein revolution?
24 Jun 2022
While excitement over alt-proteins is high among industry and investors, major challenges remain for companies looking to convince consumers to switch to a plant-based ‘meat alternative’.
Read more
New EU mineral oil limits an ‘important step for food safety’
23 Jun 2022
The EU’s decision to restrict aromatic mineral oils (MOAH) in food products has been hailed as an important step in food safety and consumer protection but consumer organisation, Foodwatch, is calling for binding regulation to go one step further.
Read more
NutriScore logo could help young people make healthier food choices – but more awareness is needed
22 Jun 2022
The European Nutri-Score labelling system can help young people make healthier food choices, according to a Spanish study – but one third still do not know what the label indicates.
Read more
Mars launches animal-free chocolate with Perfect Day’s whey protein
21 Jun 2022
Mars has launched a vegan chocolate bar made with biotech unicorn Perfect Day’s animal-free whey protein made via precision fermentation.
Read more
Unilever in $120m biotech venture to scale palm oil alternative
20 Jun 2022
Unilever has teamed up with US biotech company Genomatica to commercialise its palm oil alternative produced via a biotechnology fermentation process.
Read more
Clear and accurate precautionary allergen labelling is vitally important, says regulatory expert
17 Jun 2022
As the UK’s Food Standards Agency looks to standardise allergen label wording, it is “vitally important” that food businesses provide consumers with clear and accurate precautionary information about potential unintended allergens in ...
Read more
Monterey Mushrooms gets EU approval for vitamin D-rich mushroom powder
16 Jun 2022
Monterey Mushrooms’ vitamin D-rich mushroom powder, produced using ultraviolet (UV) to boost the nutrient content, can be sold in the EU, following novel food approval from the European Food Safety Authority (EFSA).
Read more
Soil sequestration: An emerging opportunity for farmers and food producers
15 Jun 2022
Sequestration of carbon into soil has almost the same potential to reduce greenhouse gas (GHG) emissions as the use of wind or solar power and provides farmers with an opportunity equal to that of reforestation strategies, according to Berry Marttin of...
Read more
Nitrite and nitrate alternatives gain ground for processed meat applications
14 Jun 2022
As France finalises its review into the health risks of nitrite in cured meats, industry research focuses on the potential substitutes for nitrite and nitrate in processed meats to offer consumers healthy alternatives.
Read more
Metrics matter: Measuring the true price of food for a healthy and sustainable future
13 Jun 2022
Food value chains must begin to price in the ‘externalities’ of production, including impacts on human and planetary health, if the world is to realistically create a healthy and sustainable food supply to feed a growing population, according to one of...
Read moreAre you a supplier?
Here's what we can do for you
- Generate quality leads for your business
- Stay visible for 365 days of the year
- Receive product inquiries and respond to meeting requests directly
- Improve company online presence through Search Engine Optimisation