Dairy Australia - Dairy information for Australian Dairy Farmers and the industry

Primary content

Information on the production, sales, and trends for Australian manufactured milk powders.

Milk powder

Australian manufacturers produce a range of milk powders. The technology used in both the production and use of powders has seen the range of specifications available from Australian manufacturers expand in line with customers’ needs.

In the years up until the peak milk production season of 2001/02, the most obvious trend in local milk powder production was a steady increase in the share of whole milk powder (WMP) output − from a low of 25% in the early-to-mid 1980s to a peak of almost 50% share of all milk powders produced in Australia in 2001/02. Since then, the trend reversed with skim milk powder (SMP) production regaining share to reach just under 80% of total milk powder production in 2015/16.

The limited availability of milk during the first half of the last decade and a stabilisation of milk production volumes in recent years has seen local dairy companies opportunistically changing their product mixes to take advantage of the relative movements in international dairy commodity prices. Differing market access arrangements also impact on the competitiveness of product pricing. For example, local producers will be at a competitive disadvantage where Australia may not have negotiated a Free Trade Agreement, but a competitive supplier country has already done so. This impacts on local production mixes because the bulk of Australia’s milk powder production volumes are sold into export markets. 

Australian production of milk powders (tonnes)

2010/11 2011/12 2012/13
2014/15 (r)
2015/16 (p)
Skim milk powder 222,484 230,286  224,061   210,964 242,266
Wholemilk powder* 151,269 140,424 108,838  126,322 96,840

*includes infant powder
Source: Dairy manufacturers

Only about 15–20% of Australia’s powder production is sold domestically, with local usage mainly as a food ingredient and retail outlets accounting for only a small percentage of domestic sales. Infant formula is a high-value product that has shown strong growth recently, both in Australian supermarket sales (largely attributed to the so-called grey market trade), as well as through direct Australian exports. In 2015/16 Australian exports of WMP, in the form of both regular powder and infant formula exceeded domestic WMP production, and meant that Australia itself imported some 32,000 tonnes of infant formula, and 13,000 tonnes of WMP in 2015/16 to make up the shortfall.

Exported milk powder is often recombined into liquid milk products, particularly in tropical climates where fresh milk supplies are not readily available due to limited local production and/or restricted development of cold chain distribution facilities. It is also used in bakery products (improving the volume and binding capacity of bread, and ensuring crisper pastry and biscuits), confectionery and milk chocolates, processed meats, ready-to-cook meals, baby foods, ice-cream, yoghurt, health foods and reduced-fat milks. Industrial grade powder is used for stockfeed. 

Major Initiatives

Focus Farms

Dairy Australia has established a network of Focus Farms to support farmer decision making.


DairyBase is a web-based tool that enables dairy farmers to measure and compare their farm business performance over time.

More Initiatives