Cream market review 2024 [Global Report]

The year 2024 has brought significant challenges to the global cream market, mainly due to extreme weather conditions and rising production costs. These factors have resulted in record price increases, forcing the industry to quickly adapt to rapidly changing conditions. In this report, we analyze key trends and provide forecasts that point to continued price volatility and challenges that will affect the future of the cream market.

Market dynamics

By 2024, the global market for traditional cream faced numerous challenges that forced the industry to adapt quickly to changing conditions. Climate change has had a key impact on milk production, the main raw material used in cream production. The droughts that hit North America and Europe significantly reduced the availability of feed and water, which directly translated into reduced production of milk and, consequently, cream. The result was an increase in raw material prices, which in turn affected the cost of final products.

Trade regulations have further exacerbated the market situation. The introduction of export restrictions by countries such as New Zealand has strained global supplies, particularly in regions of Europe and North America, which are large consumers of cream. Asian markets, with growing demand, have also begun to experience deficits, underscoring the importance of sustainable resource management on a global scale.

In response to these challenges, cream producers are investing in technological innovations to improve production efficiency and product quality. Modern processing technologies and cooling systems not only reduce production losses, but also enable better management of processes in the face of extreme weather conditions. Such solutions are crucial, especially in the context of increasing requirements for food safety and quality standards.

Regional analysis of the butter market

Europe

Europe is one of the most important regions in the global cream market, both in terms of production and consumption. France, Germany, Italy and the UK are the leaders in cream production, and their products are highly regarded in international markets. Europe is also a major exporter of cream, with a large share of global trade. The value of exports from the region is driven by strong demand from countries in Asia and the Middle East. However, climate change, such as droughts and weather anomalies, is increasingly affecting milk production, which could challenge the future availability of cream.

North America

North America, with the United States playing a dominant role, is a key producer and consumer of cream worldwide. The U.S. has an extensive dairy infrastructure that supplies both domestic and export markets. Despite the challenges of extreme weather events, North America remains a significant exporter of cream, particularly to Asian countries where demand for dairy products is growing. Canada’s dairy sector also plays an important role, supplying high-quality dairy products to the domestic market and exporting surpluses.

Oceania

New Zealand is one of the largest global exporters of dairy products, including cream. The country is known for its efficient and sustainable dairy production, which is based on natural pastures. In 2024, New Zealand continued its strong expansion into Asian markets, particularly China and Japan, where demand for New Zealand dairy products is high. Despite climate-related challenges such as droughts, New Zealand remains a key player in the market, thanks to innovations in production management and an efficient export system.

Asia Pacific

Asia Pacific is the region with the fastest growing demand for cream, particularly in countries such as China, Japan and India. These countries, which are major importers, are driving the global cream trade, contributing to increased exports from Europe, New Zealand and North America. Growing urbanization, rising incomes and changing consumption habits are making Asia a key market for international cream producers.

South America

South America, particularly Brazil and Argentina, is a region with a growing market for cream. Although most production is for the domestic market, exports to Europe and other regions are growing. Variable climatic conditions, including droughts and periods of heavy rainfall, affect the stability of milk production, which may limit future export growth. However, the region still has the potential to increase its share of the global market.

Middle East and Africa

The Middle East and Africa are regions where cream is growing in importance as an imported product. Gulf countries such as Saudi Arabia and the United Arab Emirates are becoming larger buyers of traditional cream from Europe and New Zealand, due to limited local milk production. In Africa, the cream market is only just developing, but a growing middle class and urbanization point to increasing demand for dairy products in the coming years.

Trends and forecasts

By 2024, cream prices have reached record levels, the result of several key factors. In Europe, cream prices have risen to more than €9,000/MT, the highest ever. This surge is being driven by limited milk supply due to adverse climatic conditions, such as drought, and rising production costs. In addition, strong demand for dairy products, especially during the summer season, has increased pressure on markets, leading to further price increases.

Emerging markets, such as the Gulf countries, are also contributing to rising demand for cream, further driving up prices. Rising production costs, both for raw materials and energy, are causing producers to pass these costs on to consumers, leading to further price increases in global markets.

In contrast, in New Zealand and other milk exporting countries, production is growing only modestly, limiting the potential for price stabilization in the near future. Forecasts indicate continued price volatility in the cream market, especially in the context of unpredictable weather conditions and continued increases in production costs.

Global Reports from Foodcom S.A.

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