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In 2019–20 Australia produced approximately 73,000 tonnes of butter and anhydrous milkfat (AMF) in commercial butter equivalent terms (CBE). AMF is butter with the water removed, like ghee. It is primarily produced for export and domestic food manufacturing applications, such as bakery and confectionery products. While these sectors also use butter, most domestic butter sales are through retail and food service outlets.

The manufacture of butter results in the creation of skim milk powder as a co-product, utilising the solids nonfat components of the milk such as lactose, casein, whey proteins and minerals.

In 2019/20, around 65% of domestic dairy spread sales were through supermarkets, up almost 10% compared to the year prior. As the COVID-19 pandemic and restrictions implemented to curb the spread of the virus impacted consumers habits, grocery sales surged as many foodservice outlets had to temporarily close. This shifted overall demand from the foodservice sector to the retail sector and contributed to this increase in supermarket sales of dairy blends. Butter imports to Australia accounted for more than a quarter of the butter market by volume in 2019/20. A majority, around 85%, of the 42,000 tonnes of butter and butteroil imported into Australia came from New Zealand. Most remaining butter was sourced from various European countries.

Butter and AMF production (tonnes)









 Butter/Butter blends (CBE)














Source: Dairy manufacturers

Australian exports of butter and AMF can vary significantly from year to year, depending on milk availability during the season and local dairy company responses to international prices for competing products. Export volumes decreased roughly 40% in 2019/20, down to 11,000 tonnes. Australia’s most important overseas markets for butter and AMF were Thailand, Greater China, Malaysia and Singapore; out of 34 countries.

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