Global Dairy Sector Outlook by Rabobank: Growth in Oceania and EU, Challenges in China

Milk Production on the Rise in Oceania and EU

In the latter half of 2024, milk supply volumes in the world’s leading export regions grew by 0.5% year-on-year, with projections indicating this trend will persist into 2025. The European Union and the United Kingdom experienced a 0.3% increase in milk deliveries in 2024. Experts forecast a further 0.5% growth in 2025, contingent on effective disease outbreak management and continued vaccination efforts against bluetongue.

China’s Milk Production Slows

In stark contrast, China’s dairy sector faces significant headwinds. Milk production in the country declined by 0.5% in 2024, driven by low prices, extreme heat, and producers exiting the industry. The outlook for 2025 appears even bleaker, with a projected decline of 1.5%. However, Rabobank anticipates a 2% increase in Chinese dairy imports as demand shows signs of partial recovery.

Price and Market Dynamics

Wholesale milk prices began to retreat in Q4 2024 but remain elevated compared to historical averages. Consumer demand in 2025 is expected to improve, bolstered by a decrease in dairy product prices, which could spur a rise in sales across key markets.

Optimistic Prospects for 2025

Rabobank predicts 2025 will be a year of sustainable growth for the global dairy industry. Improved weather conditions, stabilized profit margins, and increased Chinese imports are set to provide favorable conditions for producers worldwide. The sector is poised for recovery, with supply chain resilience and market adjustments likely to play critical roles in its trajectory.