SEB analysis: Lithuania is dominant in the Baltic dairy market

The leader of the dairy market in the Baltic states is Lithuania, which exceeds both Estonia and Latvia in production and processing volume, SEB's analysis shows. Lithuania produces almost as much raw milk per year as the other Baltic countries combined, and produces 60 percent of the Baltic dairy products.

Annual production of Baltic raw milk has remained at 3 million tonnes in recent years, nearly half of which is produced by Lithuania. The annual production of both Estonia and Latvia is between 0.7 and 0.8 million tonnes and Lithuania is close to 1.4 million tonnes. Estonia's annual production has grown in recent years, while in the case of Latvia, a downward trend can be seen. The annual volume of dairy product production is still slightly over 2.8 million tonnes in the Baltic states, of which Lithuania processes the lion's share – just under 1.7 million tonnes. The corresponding indicator for Latvia and Estonia is close to 0.6 million tonnes, and in Estonia and Latvia, growth is seen here.

Although the Lithuanian market has the largest volumes, it also has the largest gap between production and processing volumes. As a result, exports of Latvian raw milk to Lithuania increased by 12 percent in 2018.

By contrast, exports of Estonian milk to Lithuania decreased by 3 percent within a year, although they had grown strongly in the past.

“The increased demand for raw milk and the growth of the local and export markets for dairy products have increased the optimism of the dairy sector, which is recovering from the last years of decline. As a result, many milk producers and processors have started to invest again. As in other agricultural areas, we also see a gradual increase in the share of eco-production in the dairy sector,” commented Ainar Leppänen, Head of Retail Banking at SEB bank.

The world market's main dairy producers have shown growth in recent years, which has been sufficient to meet global demand. EU dairy prices have fluctuated little since 2015.

SEB has used the data of Eurostat and national statistical offices when compiling the analysis.

Additional info:

Evelin Allas
kommunikatsioonijuht
turunduse ja kommunikatsiooni divisjon
SEB Pank

telefon +372 6655 649
mobiil +371 5111 718
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e-post evelin.allas@seb.ee