🌍 Global Milk Production on the Rise in 2025 Despite Economic and Climatic Challenges
Global dairy markets are seeing a rebound, with commodity prices and production volumes increasing across major exporting regions, defying earlier downturns and signaling robust recovery in 2025.
Despite a complex global backdrop, milk production is poised to set a new all-time high in 2025, according to recent forecasts. Global milk output in major exporting regions is expected to grow by 0.8%, driven by favorable farmgate prices, improved producer margins, and steady consumer demand. The resurgence is particularly notable given previous supply constraints and continued macroeconomic pressures.
Strong Farmgate Prices Fuel Production Growth
Elevated farmgate milk prices across the EU, US, Oceania, and South America are encouraging expansion, with the positive momentum likely to extend into the first half of 2026. Farm margins remain healthy despite rising feed costs, thanks to relatively stable input prices and steady demand.
“We are witnessing a remarkable recovery in global dairy output, underpinned by strong price signals and positive market sentiment,” noted a senior dairy analyst. “This recovery is particularly significant given the persistent threats from disease, climate events, and geopolitical instability.”
Regional Highlights:
🇪🇺 European Union & UK: Stable Growth Amid Disease Risks
Milk production in the EU is forecast to increase by 0.5% year-on-year, with both the EU and UK enjoying a 20% increase in average farmgate prices compared to early 2024. However, the resurgence is not without its challenges. Animal health risks, including Bluetongue and residual concerns about Foot and Mouth Disease, could weigh on growth. Additionally, new US tariffs may present trade hurdles.
Still, economic projections of 1.2% GDP growth in the EU in 2025 are expected to bolster dairy consumption, supporting stable domestic demand.
🇳🇿 Oceania: New Zealand Leads, Australia Recovers
New Zealand’s dairy exports hit a three-year high in 2024, with continued momentum into early 2025. The sector is set for 2.5–3% growth in the 2024/25 season, buoyed by strong producer sentiment and favorable conditions.
Australia, after a late-2024 slump, is on track for 0.7% growth in 2025/26, contingent on manageable weather conditions. Drought remains a looming threat, particularly under La Niña forecasts.
🇧🇷 South America: Margins Drive Expansion
Brazil is projected to post a 2% increase in milk output in 2025, with Argentina expected to rebound by 4% following a weak 2024. However, volatile weather and currency fluctuations may complicate trade. A stronger peso could dampen exports, while La Niña may affect pasture conditions.
🇺🇸 United States: Moderate Growth Amid Policy Uncertainty
The US dairy sector saw year-on-year gains in January, driven by herd expansion — 41,000 more cows compared to 2024. Rabobank projects a 0.5% increase in total US milk production this year, supported by declining feed costs and steady farmgate prices.
California remains an outlier, with Avian Influenza disrupting output. Meanwhile, uncertainty around new federal dairy policies and international trade negotiations could impact future stability.
🇨🇳 China: Production Decline Spurs Import Demand
Unlike other regions, China’s milk production is expected to fall by 2.6% in 2025, driven by a 15% decline in farmgate prices and herd reductions. This supply contraction is likely to increase import demand, especially as domestic consumption shows signs of modest recovery.
🐄 Regional Highlights: (By Jordbrukare India)
🇮🇳 India: Leading the Surge with 5.5% Growth Forecast
India, the world’s largest milk producer, is projected to grow its milk output by 5.5% in 2025, according to Jordbrukare India. This growth reflects strong domestic demand, government support for the dairy sector, and expansion among organized and cooperative dairy players.
With consumer demand rebounding post-pandemic and milk procurement improving across key states like Uttar Pradesh, Maharashtra, and Gujarat, India continues to anchor global supply. However, challenges such as rising input costs, heat stress on livestock, and infrastructure gaps in cold chain logistics remain areas to watch.
“India’s consistent growth trajectory demonstrates the country’s resilience and expanding role in the global dairy narrative,” said a senior economist at Jordbrukare India. “With investments in breed improvement, nutrition, and processing capacity, the sector is poised for sustained expansion.”
