Dairy production & trade


International Dairy Production

Annual global milk production is estimated to be 644 million tonnes, of which 84 per cent or 541 million tonnes is cows’ milk. Production of buffalo, sheep and goats’ milk is estimated to account for a further 103 million tonnes, with much of this centred in Asia.

Major cows milk producers include the European Union (EU) (142 million tonnes), North America (91 million tonnes), Russia (32 million tonnes), India (46 million tonnes) and Brazil (25 million tonnes).

Including buffalo and goats’ milk, with cows’ milk, India is the world’s largest milk producer outside the EU with over 94 million tonnes. Australia’s annual production of 10 million tonnes represents just over 2 per cent of global cow’s milk production.

Dairy Product Consumption

Global demand trends for the major dairy product categories have varied considerably in recent years.

After gradually declining since the mid 1980s, per capita consumption of butter has now stabilised in most Western countries. By contrast, commercial demand for cheese continues to increase, in both developed and developing markets.

Consumption of fresh products such as yogurt and liquid milk has not altered significantly in developed dairy markets, but there has been a shift in demand towards reduced fat varieties.

However, demand for these products in Asia and Central and South America has increased rapidly in the past decade. This in turn has fuelled strong demand for dairy ingredients such as milk powders.

International Dairy Trade

Share of Production Traded

About 7 per cent of global milk production is traded in international markets each year. The major traded items are butter, cheese, milk powders, casein and condensed milk.

For individual products, the share of production traded is generally much higher than for milk overall. For example, around 10 per cent of world butter production is traded internationally, while for skim milk powder (SMP) the proportion is 30 per cent.

Major Dairy Exporters

The European Union (EU) remains the world’s major dairy exporters both accounting for 32 per cent of all export sales on a milk equivalent basis, (ie in terms of the total volume of raw milk required to manufacture all traded dairy products).

Also, although accounting for only 3 per cent of world milk output, New Zealand is the second largest supplier of manufactured products to the world market with a 32 per cent share.

Australia accounts for around 1 per cent of export sales based just on a 2 per cent share of world milk output.

The USA, while a major milk producer, accounts for only 8 per cent of world trade. In recent years the USA has increased their share sharply.

Other significant dairy exporting nations include Canada, Argentina and Uruguay, while Poland and the Czech Republic remain important suppliers to world markets for specific products such as SMP and cheese.