Global Dairy Market Outlook: Trends in Production, Consumption, and Trade
Source: DairyNews.today
The global dairy industry is undergoing a transformative period, shaped by evolving production strategies, shifting consumption patterns, and dynamic trade landscapes.
Key dairy-producing regions, including the United States, European Union, India, China, New Zealand, and Australia, are navigating these changes while responding to external challenges such as climate variability and geopolitical tensions. A comprehensive review of recent USDA data offers insights into what the global dairy market might look like by 2025.
New Zealand
New Zealand's dairy sector faces headwinds with milk production forecast to drop to 21.3 million metric tons (MMT) in 2025, slightly below the five-year average. Domestic consumption remains minimal, with over 98% of milk output destined for export.
Shift in Exports: Producers are pivoting from milk powder to high-value dairy products such as cheese, butter, and infant formula. While whole milk powder (WMP) exports decreased to 41% of total dairy exports in 2024, demand from emerging markets like the UAE and Bangladesh is offsetting declines in China (-5.5%) and Algeria (-18%).
Specialty Products: Exports of high-value products like protein concentrates and lactoferrin surged 13.8% YoY in early 2024, highlighting a focus on premium markets.
Australia
Australia's dairy production is set to grow modestly by 1.1% in 2025 to reach 8.8 MMT, buoyed by a rebound in milk consumption.
Cheese Focus: After a temporary dip in 2024, cheese production is expected to stabilize at 375,000 MT, while exports are projected to decline to 150,000 MT, down from 165,000 MT in 2024.
Export Moderation: Strong performance in 2024 exports of skim milk powder (SMP), WMP, and butter is expected to moderate in 2025.
China
China’s growing milk production and changing demographics are reshaping its import patterns.
Declining Imports: Fluid milk, whey, butter, WMP, and SMP imports are expected to drop in 2024, influenced by self-sufficiency and declining birth rates. Cheese imports, however, are likely to remain stable due to limited domestic production capacity.
Geopolitical Risks: Potential trade disputes with the U.S. and ongoing EU dairy subsidy investigations may further disrupt imports. Analysts predict limited market impact until at least 2026.
India
As the world’s largest dairy producer, India is poised for continued growth, with milk production projected to exceed 216 MMT in 2025.
Drivers of Growth: A growing herd size, favorable weather, government support, and high milk prices are driving production increases.
Rising Demand: Increased disposable income and population growth are expected to boost consumption of milk, butter, and SMP, though rural per-capita intake remains below dietary recommendations.
European Union
The EU dairy market is grappling with declining fluid milk production, projected to drop to 148.9 MMT in 2024, while cheese output is set to rise by 0.6% to 10.62 MMT.
Shifts in Production: A focus on cheese has reduced butter and nonfat dry milk (NFDM) output, with WMP production also expected to decline by 3.9%.
Trade Prospects: NFDM exports are forecast to drop by 7.6% due to weaker Chinese demand and competition from the U.S. and New Zealand. A recently signed free trade agreement with Mercosur may offer new opportunities for powder exports.
United States
The U.S. dairy sector is poised for growth, with milk production forecasts for 2024 and 2025 revised upwards.
Expanding Herds: The U.S. dairy herd is expected to grow by 30,000 head to 9.39 million, contributing to a 0.3 billion-pound increase in milk production for 2025.
Export Outlook: 2025 exports are forecast to rise for butter and cheese but decline for skim milk products, reflecting less competitive pricing. Imports of cheese, butter, and WMP are also expected to increase.
Price Trends: Adjusted forecasts indicate lower 2025 prices for cheddar cheese and butter, while nonfat dry milk (NDM) and dry whey prices are expected to increase.
Looking Ahead
The global dairy industry is navigating a complex interplay of supply constraints, demand shifts, and geopolitical factors. Producers are increasingly focusing on high-value products and sustainable practices while adapting to evolving market dynamics. As the industry heads toward 2025, these trends will shape both opportunities and challenges in global dairy markets.
New Zealand
New Zealand's dairy sector faces headwinds with milk production forecast to drop to 21.3 million metric tons (MMT) in 2025, slightly below the five-year average. Domestic consumption remains minimal, with over 98% of milk output destined for export.
Shift in Exports: Producers are pivoting from milk powder to high-value dairy products such as cheese, butter, and infant formula. While whole milk powder (WMP) exports decreased to 41% of total dairy exports in 2024, demand from emerging markets like the UAE and Bangladesh is offsetting declines in China (-5.5%) and Algeria (-18%).
Specialty Products: Exports of high-value products like protein concentrates and lactoferrin surged 13.8% YoY in early 2024, highlighting a focus on premium markets.
Australia
Australia's dairy production is set to grow modestly by 1.1% in 2025 to reach 8.8 MMT, buoyed by a rebound in milk consumption.
Cheese Focus: After a temporary dip in 2024, cheese production is expected to stabilize at 375,000 MT, while exports are projected to decline to 150,000 MT, down from 165,000 MT in 2024.
Export Moderation: Strong performance in 2024 exports of skim milk powder (SMP), WMP, and butter is expected to moderate in 2025.
China
China’s growing milk production and changing demographics are reshaping its import patterns.
Declining Imports: Fluid milk, whey, butter, WMP, and SMP imports are expected to drop in 2024, influenced by self-sufficiency and declining birth rates. Cheese imports, however, are likely to remain stable due to limited domestic production capacity.
Geopolitical Risks: Potential trade disputes with the U.S. and ongoing EU dairy subsidy investigations may further disrupt imports. Analysts predict limited market impact until at least 2026.
India
As the world’s largest dairy producer, India is poised for continued growth, with milk production projected to exceed 216 MMT in 2025.
Drivers of Growth: A growing herd size, favorable weather, government support, and high milk prices are driving production increases.
Rising Demand: Increased disposable income and population growth are expected to boost consumption of milk, butter, and SMP, though rural per-capita intake remains below dietary recommendations.
European Union
The EU dairy market is grappling with declining fluid milk production, projected to drop to 148.9 MMT in 2024, while cheese output is set to rise by 0.6% to 10.62 MMT.
Shifts in Production: A focus on cheese has reduced butter and nonfat dry milk (NFDM) output, with WMP production also expected to decline by 3.9%.
Trade Prospects: NFDM exports are forecast to drop by 7.6% due to weaker Chinese demand and competition from the U.S. and New Zealand. A recently signed free trade agreement with Mercosur may offer new opportunities for powder exports.
United States
The U.S. dairy sector is poised for growth, with milk production forecasts for 2024 and 2025 revised upwards.
Expanding Herds: The U.S. dairy herd is expected to grow by 30,000 head to 9.39 million, contributing to a 0.3 billion-pound increase in milk production for 2025.
Export Outlook: 2025 exports are forecast to rise for butter and cheese but decline for skim milk products, reflecting less competitive pricing. Imports of cheese, butter, and WMP are also expected to increase.
Price Trends: Adjusted forecasts indicate lower 2025 prices for cheddar cheese and butter, while nonfat dry milk (NDM) and dry whey prices are expected to increase.
Looking Ahead
The global dairy industry is navigating a complex interplay of supply constraints, demand shifts, and geopolitical factors. Producers are increasingly focusing on high-value products and sustainable practices while adapting to evolving market dynamics. As the industry heads toward 2025, these trends will shape both opportunities and challenges in global dairy markets.
