According to the latest biannual Food Outlook report from the United Nations Food and Agriculture Organization (FAO), global milk production is projected to reach 992.7 million tonnes in 2025, reflecting a year-on-year growth of 1%. This marks the second consecutive year of modest expansion in the global dairy sector.
Asia Leads Global Growth: India, Bangladesh, Pakistan Drive Surge
The report highlights Asia as the primary growth engine, with India, Bangladesh, and Pakistan expected to post strong gains due to continued herd expansion and gradual productivity improvements. These increases are projected to more than offset a production decline in China, where sustained cost pressures and falling farmgate prices are hindering growth.
India’s Pivotal Role in Global Milk Supply
India remains the world’s largest milk producer, contributing approximately 23% of total global milk output. With strong domestic demand, government-backed cooperative networks, and widespread rural participation, India’s dairy sector is a key pillar of both national and global food security. The country’s emphasis on smallholder-driven production, coupled with a shift towards value-added products and improved cold-chain infrastructure, continues to drive steady year-on-year growth.
According to the IDF World Dairy Situation 2024 report, India—along with China—accounts for half of global milk consumption. India’s role is further underscored by its leadership in cow and buffalo milk production, with milk serving as a crucial source of income and nutrition across rural economies.
Regional Outlooks: Americas Rising, Europe Steady, Africa Faces Challenges
In the Americas, significant growth is forecast in Brazil and Mexico, alongside a recovery in Argentina and the United States. Meanwhile, Europe and Oceania are expected to post stable or marginally positive growth amid divergent national trends. Africa, however, could see a slight contraction due to rising input costs and conflict-related disruptions.
Trade Outlook: Global Dairy Trade to Shrink by 0.8%
Dairy trade, measured in milk equivalents, is forecast to contract by 0.8% in 2025. While a rebound in Chinese imports is anticipated—spurred by growing food industry demand and declining domestic output—this uptick is unlikely to offset expected import declines in Africa, Latin America, and the Near East.
Export shifts are also expected: falling shipments from the European Union, Saudi Arabia, and the United States may be partially balanced by increased exports from New Zealand and Uruguay.
IDF Confirms Asia’s Dominance
The International Dairy Federation (IDF), in its World Dairy Situation 2024 report, confirms the regional shift, noting that China and India account for 50% of global milk consumption. The IDF projects a 2.1% rise in annual milk output, reaching 964 million tonnes, largely driven by robust domestic demand in these two countries.
Dairy Prices Climb: FAO Index Up 21.5%
The FAO Dairy Price Index averaged 153.5 points in May 2025, up 21.5% year-on-year. Prices for butter and cheese reached record highs due to tight global supplies and strong demand, especially in Oceania and the EU. Whole milk powder prices also surged, while skim milk powder prices dipped due to oversupply in Europe and tepid demand in Asia.
Conclusion: Asia Reshapes Global Dairy Landscape
With Asia continuing to drive demand and production, the global dairy sector is entering a new phase of regional realignment. Rising prices, shifting trade patterns, and cost-sensitive production dynamics will define the industry’s evolution in 2025 and beyond.
