In 2015/16, Australia produced 118,600 tonnes of butter and anhydrous milkfat (AMF) or butteroil in commercial butter equivalent terms (CBE) – almost unchanged from the previous year.

Butter and AMF production (tonnes)

  2010/11 2011/12 2012/13
2014/15 (r)
2015/16 (p)
Butter/Butter blends (CBE) 96,326 100,551 99,035  101,705 101,641
AMF (CBE)  26,160 19,164  19,193 14,417 16,943
 Source: Dairy manufacturers

AMF is butter with the water removed. It is produced mainly for export and domestic food processing applications, such as bakery and confectionery. While these sectors also use butter, the majority of domestic butter sales are through retail and foodservice outlets. 

The introduction of spreadable butters and vegetable oil-based dairy blends, which are easier to spread and lower in saturated fat, has helped to stabilise domestic market sales in the last two decades, after a sustained decline through the 1970s and 1980s.

Nevertheless, Australia’s total retail market for tablespreads has generally contracted over the last decade. Consumer concerns about margarine consumption have meant a continuing decline in share, with dairy spreads taking further retail market share from margarine. This has been a continuing trend over the last decade, as dairyspreads’ share of the category has steadily increased from 30% in 2000/01 to 50% in recent years. 

It is estimated that around 50% of the domestic sales of Australian dairyspreads were through supermarkets. Supermarket sales volumes increased 3.6% in 2015/2016, together with a 3.0% increase in average retail prices during the year, delivered an increase in retail sales value of 3.8% over the previous year to more than $432 million.

See Domestic Sales Summary for more details on supermarket sales of butter.