Increasing Interest in Cheese Production Fuels Dairy Sector Growth

Many people have started a dairy business in recent years, and most of them see cheese making as a new venture. Based on the distribution of registered capital, 58 percent of dairy processing and dairy product manufacturing companies were Hungarian-owned, meaning that the share of foreign capital in the sector has increased, according to a summary by the Institute of Agricultural Economics (AKI).

In view of the government’s objective – not to export raw materials from Hungary, but to produce the higher value-added product at home – it is encouraging that more companies have started milk processing in recent years. Among these, cheese production has expanded the most through the growth of artisanal and small-scale processing, points out Világgazdaság. Subsidies have also made a significant contribution to this: last year, for example, HUF 15.2 billion (EUR 37.5 million) for dairy cows, HUF 9 billion (EUR 22 million) for the national milk subsidy, and HUF 2.2 billion (EUR 5.4 million) for the school milk program.

In addition to new plant start-ups, many large companies have built new product lines, made a number of improvements to increase capacity, and launched new products.

On the other hand, there were companies that stopped production.

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According to AKI’s summary, the technical capacity of the cold storage for milk processing was 17.1 thousand tons, and there were considerable differences in the capacity utilization of these stores.

The weighted average capacity utilization of pasteurization plants was 39.6 percent in 2023, 2.1 percentage points higher than in 2020. 52.3 percent of pasteurization plants were under 40 percent capacity utilization, and only one fifth of plants exceeded 60 percent capacity utilization. The weighted capacity utilization of the five largest companies involved in production was 41.1 percent for pasteurization plants and 57.6 percent for pasteurized milk lines.

According to the data received, in 2023, 772.2 thousand liters of milk have been pasteurized per hour, 120.6 thousand liters of UHT (ultra-high temperature) milk and 36.4 thousand liters of cream have been produced per hour on the production lines.

However, the production of natural cheese has increased to 29.9 tons per hour, which is five tons more than in 2020,

as more new companies started producing cheese in Hungary last year.

Butter and buttercream took 5.8 and 8.9 tons respectively of the hourly production of dairy products. Domestic producers were able to produce 20 tons of cottage cheese in one hour in 2023. The weighted average capacity utilization rate of lines producing soured milk and sour cream preparations was 34.3 percent in 2023. The lower utilization rate is typical for the production line, as nearly 60 percent of the soured milk and cream products production units had utilization rates below 40 percent. Only eight percent of soured milk and milk product manufacturers had capacity utilization rates falling into the very high category, above 80 percent in 2023.