Poland’s dairy sector is undergoing a profound transformation due to market volatility, succession issues and labour shortages. According to the Polish industry publication Farmer.pl, analysts at Credit Agricole have outlined three scenarios for the development of the Polish dairy sector up to 2035.

The document ‘Analysis of the Polish Dairy Sector’ presents three possible scenarios for the development of the dairy industry in the coming years. The forecasts were prepared by Dr Jakub Olipra of Credit Agricole.

The baseline scenario — the gradual closure of farms

This scenario anticipates a further decline in the number of dairy farms due to the low profitability of some farms and succession issues in family-run businesses. Based on an analysis of the structure of Polish dairy farms, it is predicted that their number will fall to around 40,000.

The decline in the number of farms will lead to a further reduction in the dairy cow herd to around 1.9 million head.

At the same time, the professionalisation of the farms that remain in the market will help to boost productivity. Average productivity is expected to rise to 8,500 litres of milk per cow.

The optimistic scenario — restructuring and succession planning

According to Jakub Olipra, the optimistic scenario also envisages a reduction in the number of dairy farms, although this process will proceed at a slower pace thanks to the implementation of restructuring programmes and effective succession planning.

As a result, some of the farms that are currently operating at the break-even point will not only be able to remain in the market but also expand their operations. In this scenario, the number of farms will fall to around 50,000.

Despite the decline in the number of farms, the reduction in the herd size resulting from the closure of unprofitable farms will be offset by the expansion of other farms. As a result, the dairy cow herd could grow to 2.2 million head.

The restructuring will also help boost productivity to around 9,200 litres of milk per cow.

The pessimistic scenario — a sharp decline in the number of farms

The pessimistic scenario forecasts a further sharp decline in the number of dairy farms. Unlike the baseline scenario, this process will accelerate due to the difficulties farms face in adapting to the requirements of the European Green Deal and a possible reduction in funding from the EU’s Common Agricultural Policy during the 2028–2034 budget period.

As a result, the number of dairy farms could fall to around 30,000. This reduction in the number of farms will lead to a further decline in the cow herd to approximately 1.6 million head. This reduction will not be offset by an increase in the herd size on the farms that remain in the market.

In this scenario, productivity will also increase as the sector becomes more professional, albeit at a slower rate than in the baseline scenario. By 2035, it could reach 8,100 litres of milk per cow.

How will this affect milk production?

Under the baseline scenario, milk procurement in Poland is set to rise to 17.0 million tonnes by 2035 (an increase of 25.4% compared with 2024). Although this would represent a fairly significant increase in supply, given the prospects for growth in domestic consumption, the export potential of the Polish dairy sector would be significantly reduced.

In the optimistic scenario, there is significantly more scope for growth in supplies, which could reach as much as 20.7 million tonnes by 2035 (a 53.1% increase compared to 2024). Poland would thus significantly strengthen its position in the EU milk market, generating substantial export surpluses. As a result, the dairy sector could develop through two channels: the domestic market and exports.

In a pessimistic scenario, milk supplies will stabilise at current levels over the forecast period. Given the expected growth in consumption of milk and dairy products over the forecast period, this would mean that, in the worst-case scenario, Poland could lose its self-sufficiency in milk production.

Source: Farmer.pl