International market overview

Over the past two decades Australian milk production has been well above that volume required for domestic consumption, so that a significant proportion is destined for export markets. The share of total production exported has ranged from 40-60% over the period shown in the figure below. In the last three years Australia exported around 45% of its milk production – the lowest proportion since the mid-1990s, due to the reduced availability of product for export.

While Australia accounts for an estimated 2% of the world’s milk production, it is a significant exporter of dairy products. Australia ranks third in terms of world dairy trade – with an 10% share – behind the European Union and New Zealand.

Japan is the single most important export market for Australia, accounting for 19% of exports by value. Australian exports are concentrated in Asia, which represented 72% of the total dairy exports value of A$2.4 billion in 2009/10. 

This concentration of exports in Asia/East Asia reflects both Australia’s geographic proximity to these markets and the extent to which Australia is excluded from other major markets by direct restrictions (as in the case of the European Union) or the impact of the export subsidy programs of major competitor countries.

The Asian markets have considerable potential for consumption growth as incomes rise and diets become more ‘westernised’. Australian dairy companies have proven track records in supplying these markets over a number of decades. The Middle East and the Americas are also becoming increasingly important markets for many Australian exporters. 

Australia’s top five export markets by volume in 2009/10 were Japan, Singapore, China, Indonesia and the Philippines; while the top five export markets by value were slightly different in Japan, China, Singapore, Indonesia, and Malaysia.  The fastest growing export market for Australia has been China.