The market for milk producers and processors in Poland is consolidating — and the process has accelerated in recent years. According to the President of the Association of Polish Milk Processors (ZPPM), this is a healthy development that strengthens the sector by leaving only the most competitive players. Consolidation, he argues, is particularly important amid rising labor and energy costs, export challenges, and increasing global competition. While the EU–Mercosur trade deal poses limited direct risk for dairy producers, it underscores a declining political position of agriculture in Europe compared to other industries.
Global milk prices rise while the Polish market remains stable
Global milk prices have been rising since 2024. The FAO Milk Price Index reached 152.6 points in August 2025, down 1.3% month-on-month but still 16.2% higher than a year earlier. The decline was mainly due to lower international prices for butter, cheese, and whole milk powder, which offset an increase in skimmed milk powder prices.
“The Polish dairy market is currently stable — both in terms of farm-gate milk prices and retail product prices,” says Marcin Hydzik, President of the Association of Polish Milk Processors (ZPPM), in an interview with Newseria. “However, there are fewer farmers, fewer milk producers, and fewer processing companies. The market is consolidating, and that’s a healthy trend. As the third-largest milk producer in Europe, Poland needs strong entities capable of negotiating with retail chains and sustaining exports. Everything is moving toward a robust market dominated by a smaller number of strong players.”
Hydzik notes that consolidation has accelerated sharply in recent years.
“Previously, we saw one or two mergers every few years. Now we’re seeing multiple mergers annually. That’s still better than the bankruptcy of cooperatives or dairy plants — though, unfortunately, some are collapsing. When a cooperative is unattractive to potential buyers, it faces closure because small entities find it increasingly difficult to survive,” he explains.
Poland stands out in the EU for milk production growth
Across the European Union, total raw milk deliveries to processors in 2024 rose by only 0.3% year-on-year. Significant declines occurred in Germany, Ireland, and the Netherlands — key players in EU dairy production. Against this backdrop, Poland stood out with positive production dynamics and the largest volume growth in the entire EU.
Still, the industry faces mounting challenges linked to high production costs — not only from labor and energy but also new regulatory fees. One controversial example is the Agriculture Protection Fund, which the ZPPM opposed. The organization argued that dairy producers would effectively subsidize potential losses in other agri-food sectors, despite differing insolvency risks.
Another potential burden is the planned Extended Producer Responsibility (EPR) regulation, under which producers would pay fees for the collection, recycling, or disposal of packaging used for dairy products.
“When costs rise, competitiveness naturally declines. Labor costs, which once gave Poland an advantage, no longer do — and that weakens our position in global markets. Other countries still enjoy lower labor expenses, so we need to adapt, seek new export markets, and stay competitive internationally,” Hydzik says.
Export risks and domestic consumption trends
Domestic milk consumption continues to grow steadily, although it is unclear whether this reflects increased Polish demand or the impact of Ukrainian refugees, who boosted consumption sharply after 2022. Surplus production is directed mainly toward exports.
“In past years, we earned substantial profits from exports, but the current global situation — uncertainty and logistical disruptions — has made international trade far riskier. Markets open and close unexpectedly, and transport challenges persist, including the Belarus border and the Taiwan Strait, which is one of the world’s most critical trade routes,” Hydzik explains. “We must respond quickly to global developments and anticipate risks to navigate around them.”
The EU–Mercosur deal: symbolic of agriculture’s waning political influence
A recent major topic for the agri-food sector has been the EU–Mercosur trade agreement with four South American countries, aimed at easing trade in agricultural products. On September 3, 2025, the European Commission presented its conclusions and recommended that member states approve the deal.
According to the Commission, the agreement will reduce tariffs and non-tariff barriers while protecting more than 350 high-quality European food products. The 30,000-ton cheese quota granted under the deal is nearly ten times current EU export levels to Mercosur countries, creating new opportunities for European dairy exporters.
However, Polish processors remain cautious.
“The Mercosur agreement could affect us in the long term because, contrary to popular belief, milk production does exist there — and in some countries, it’s quite significant. Still, it’s not comparable to the potential impact of opening the market to Ukrainian dairy products, which would be on a completely different scale,” says Hydzik. “Geography also matters. But overall, this agreement reflects a weakening political position of agriculture in both Poland and Europe. Other industries — especially chemical and automotive — have gained influence, while agriculture’s voice is increasingly overlooked.”
Despite these challenges, Poland’s dairy industry remains one of the most dynamic in the EU, combining strong export performance with growing domestic consumption. Continued consolidation, innovation, and cost optimization will determine whether Polish dairy producers can maintain their competitive edge in an increasingly volatile global market.
