Despite record export figures, the Polish dairy sector has reached a turning point. A growing wave of cheap butter imports from outside the EU, combined with a fundamental imbalance in the EU market, is creating dual pressure that threatens the profitability of domestic production. While this situation appears beneficial to consumers, it risks destabilizing the market in the long term.
The first half of 2025 saw record exports for Poland, totaling 2.1 billion EUR (up 14% year-over-year). However, this success masks a growing threat. During this period alone, nearly 7,000 metric tons more butter from third countries entered the Polish market than in the previous year.
What does this mean for consumers?
“For consumers, this is seemingly good news and the prospect of lower prices on the shelf. However, in the long run, it’s a trap. The decline in domestic production in favor of imports threatens food security and leads to dependence on global price fluctuations. Furthermore, it is crucial that all products on our market, regardless of origin, meet the same rigorous EU standards—which is not always a given. “Short-term savings cannot come at the expense of the stability and quality we’ve come to expect,” says Mateusz Augustyniak, Board Member and Partner at Foodcom S.A.
The Ticking Time Bomb of EU Inventories
Poland’s problem is a symptom of a deeper imbalance across the entire European Union. The latest data for the second quarter of 2025 show that, with milk production remaining stable (0.06% y/y), EU exports fell by 2.7% due to low price competitiveness. As a result, inventories are rising sharply—available supplies of whole milk powder (WMP) increased by 20.5%, and skim milk powder (SMP) by 5.5%.
“This growing mountain of inventory is a ticking time bomb for the entire European market. Processors cannot indefinitely store goods for which there is no market. This will inevitably lead to a drop in raw material purchase prices. The stability we’ve been seeing was an illusion,” adds Mateusz Augustyniak.
Innovation Instead of Price Competition
The situation is complicated by new trade agreements with Mercosur countries and the U.S., which, on the one hand, open up new markets and, on the other, intensify import pressure.
“Our success to date has been based on the strength of the EU’s internal market. Now that’s not enough. We must accelerate our strategic shift toward high-value-added products. In the face of declining demand from China and growing competition, the future lies in innovation and specialization—in the production of advanced ingredients, such as whey protein concentrates (WPC) or lactoferrin, for which global demand is growing. “Competing on price in the mass-market powder sector will become increasingly difficult,” concludes Mateusz Augustyniak.
The clash between record export results and growing import pressure and instability in the EU market exposes the weaknesses of the current development model. The coming months will be crucial and will force both processors and farmers to redefine their strategies. Those who adapt most quickly to the new reality—by focusing on innovation, market diversification, and building brand value, rather than just competing on price—will survive and strengthen their position.
