Competitiveness in dairy trade-the case of EU and the Visegrad Group countries

Abstract

The European Union (EU) produces 15% of its agricultural production in the dairy industry. The article focuses on the European Union and Visegrad Group's (VG) dairy export and analyses it with Balassa's (Revealed Comparative Advantage, RCA) index. Our aim is to explore the foundations of EU's competitiveness and the role and opportunities of the dairy sector in VG countries. The analysis is based on EU dairy export data for the period 2000-2017. The main result of the analysis is that the most competitive countries in terms of export performance (Denmark, France, Ireland and Belgium) do not fully align with the order of the largest dairy producing and processing countries (Germany, France, the United Kingdom, the Netherlands) or the largest dairy exporters (Germany, the Netherlands, France and Belgium). We have discovered that some EU countries have a really strong, dominant competitive advantage. The reason for this is that the highest customer value can be achieved through the production of highly processed products, and the most competitive countries specialize in the production of one or a few of these products.