Sales of Irish butter into the US market are already set for another record year in 2026, building on the rapid and substantial growth seen over recent years.

Ornua’s Kerrygold brand remains by far the largest selling grass-fed butter in the US, with Kerrygold passing the $1 billion retail sales milestone in 2025 and is the number one imported butter brand in that country.

This success has come despite the considerable challenges posed by US President Donald Trump’s tariff regime and increased competition in the premium butter segment.

Data from Bord Bia shows that Irish butter exports to the US have continued to grow so far in 2026, with volume up 48% and value 41% higher in the five months to the end of May when compared to the same period in 2025. Those exports are more than 20 times higher, by value, when compared to the first five months of 2016 (see Figure 1).

Importantly that increase in the volume of butter exports to the US has been accompanied by an increase in the value per kg of those shipments. The price per kg so far in 2026, at €8.68, is more than twice the value seen in 2016, and only a small discount from the price per kg in the first five months of 2025 (see Figure 2).

It is clear from the data that the market for Irish butter in the US is both substantial and growing.

However, Irish butter is not alone in the US grass-fed butter segment, with New Zealand producers making inroads into the market in recent years. Domestic US grass-fed butter production has also increased in response to growing consumer demand.

Costco deal

Against this backdrop, the news this week that Tirlán has agreed a deal to supply private-label butter to Costco seems perfectly reasonable.

After all, there clearly is room in the market for more grass-fed butter, and if it is not supplied from Ireland, the demand will be met from elsewhere.

Significantly, the Costco deal appears to be a case where Irish butter is getting into a private-label product which previously was supplied exclusively from New Zealand.

The Tirlán spokesperson who talked to the Irish Farmers Journal made this very point, saying that developments in the US butter market are “market-led and extend beyond any single supplier, source country or brand”.

The spokesperson also highlighted the changing dynamics within the US market saying: “As consumer demand for grass-fed dairy continues to grow, retailers are expanding their own premium grass-fed ranges.

“Private-label products are now an established feature of the category.”

From Tirlán’s perspective, there is an opportunity in the private-label market in the US which the co-op has decided to take advantage of.

Again, the spokesperson said: “When opportunities arise that create additional value from Irish grass-fed milk and complement existing routes to market, Tirlán has a responsibility to evaluate them carefully on behalf of our members.”

Clearly, Tirlán has seen a space in the market and decided to take advantage of it. Ornua is not involved in selling butter through the private-label market, so it would not be in a position to engage with any opportunities in that space.

This is not Tirlan’s co-op’s first foray into the US premium butter market. The Truly Grass Fed range has been on sale there since it was launched by Glanbia in 2019.

At the time, the launch of a product directly competing with Kerrygold caused considerably difficulties for the board of Ornua as senior management of member co-ops sat on that board which led to some major conflicts of interest when it came to financial information.

A restructuring of the board since then has seen those senior management replaced by representatives from the co-ops. Tirlán’s current representative on the board of Ornua is Frank Tobin who retired from Tirlán last year.

This does not mean that Ornua has been sanguine in its response to Tirlán’s latest move into the US market. A spokesperson for the co-op said: “Competition is a feature of every successful marketplace, and Ornua has more than six decades of experience competing strongly around the world.

“However, we do not believe competing on price alone is in the best interests of the farmers we represent, as it devalues the Irish grass-fed butter proposition, rather than building this through innovation, quality and long-term brand investment,” they added.

“When market value is eroded, it has a direct impact on the amount we return to our members and the Irish dairy farming families we represent.

“Ornua believes the greatest long-term value for Irish dairy farmers is created when our members continue to invest through Kerrygold, the brand they have built and supported for more than 65 years.

“Our focus remains on protecting the significant investment Irish dairy farmers have made in the Kerrygold brand since 1962, defending its hard-earned position in global markets, delivering an unmatched Kerrygold experience for consumers and continuing to build its value for farmers today and for future generations,” the spokesperson said.

The Ornua statement makes a couple of important points. Firstly, that the growth in the Kerrygold brand, and indeed the market for grass-fed butters in the US, has not come about by accident or chance. Ornua has invested in growing the brand – and consumer knowledge – of the premium product for decades.

Secondly, that positioning Kerrygold as a premium product allows Ornua to maximise the returns to its member co-ops and, ultimately, to the farmers supplying that milk.

Comment

Any successful market for any product will see increased competition, and there is nothing exceptional about demand in the US for grass-fed butter which means that market would be any different.

What Ornua has managed to do over the past six decades is to create increased awareness of the quality of grass-fed Irish butter in key export markets.

This has taken a long time, but now that the consumer awareness exists, and demand has exploded, it is inevitable that competitors will move into the space.

Tirlán has been on US supermarket shelves with Truly Grass Fed since 2019, but it doesn’t ever seem to have reached a scale that would challenge Kerrygold’s dominance.

In recent years, we also saw Lakeland enter the private-label US business through its partnership with Vital Farms, a move which was ended by that US partner earlier this year. Kinisla also has a presence on US shelves with its grass-fed spreadable butter.

Fundamentally, competition for Kerrygold from Irish co-ops is nothing new. The thing that is new in this case is that the Costco product – which Tirlán is supplying into – will compete on price as well as quality.

The current iteration of the Costco product retails at an almost 30% discount to the equivalent Kerrygold butter. That cost saving has to come from somewhere. Under a private-label deal, Tirlán will not have any of the marketing or other commercialisation costs which Ornua faces in getting its product in front of customers – so there is a chance that, for Tirlán, it could be more profitable to send butter to Costco than to send it to Kerrygold Park.

However, once Irish grass-fed butter becomes a product where competition is on price, as well as quality, then there is a risk that suppliers could end up in a race to the bottom where margins are pressurised for all makers of grass-fed Irish butter.

Back in 2019, there was consternation when Tirlán (then Glanbia) first moved into the US market, but there has been little sign since of any disruption from that product for Ornua – in fact, the argument could be made that a pretender to the throne might have increased Ornua’s focus on the US market. It is certainly true to say that Ornua’s US sales increased massively since 2019.

Maybe this time will be different and Ornua’s bottom line will suffer from the new competition, which in turn will hit returns to farmers. Or, it could be that the US butter market is big enough for everyone, and it is better that the US market is served by any Irish butter than by imports from elsewhere in the world.