India's milk production growth is expected to slow to 2% in 2027 as El Niño-linked drought conditions threaten feed and fodder availability and affect animal productivity, according to the latest forecast by the US Department of Agriculture (USDA).
The USDA's Foreign Agricultural Service (FAS), New Delhi, projects India's milk production at 226.5 million metric tonnes (MMT) in calendar year 2027, compared with estimated growth of 2.5% in 2026. The outlook highlights the growing influence of climate conditions on India's dairy supply chain.
El Niño Raises Concerns Over Feed and Fodder Availability
The expected drought conditions could affect the availability of green fodder, dry fodder and other animal feed resources. Reduced feed availability, combined with higher feeding costs and heat stress, may constrain milk yields and overall productivity.
The impact could be particularly significant for India's smallholder-based dairy sector, where millions of farmers depend on locally available feed and fodder resources.
India's dairy production is concentrated in six major states—Uttar Pradesh, Rajasthan, Madhya Pradesh, Gujarat, Maharashtra and Punjab—which together account for more than 60% of national milk output. Weather-related disruptions in these regions could have wider implications for procurement, processing and retail supply.
Higher-Yielding Animals to Support Production
Despite the climate-related risks, structural improvements in India's dairy sector are expected to provide some support to production.
The USDA projects the number of cows in milk to increase by 1.3% to 63.3 million in 2027. The gradual shift towards higher-yielding crossbred cows and indigenous buffaloes, alongside improvements in breeding, animal husbandry and disease control, is expected to support output.
However, productivity gains may not be sufficient to fully offset the impact of adverse weather and tighter feed supplies.
Domestic Dairy Consumption Expected to Grow
India's dairy market remains largely driven by domestic consumption. The USDA forecasts fluid milk consumption to increase by slightly more than 2% to 95 MMT in 2027.
Milk consumption by processing units is also projected to rise by just under 2% to 131.5 MMT, supported by demand for processed dairy products and growing consumer interest in nutrition.
This demand growth could increase pressure on milk availability, particularly if production expansion remains slower than consumption growth.
Butter and SMP Production to Increase
Despite slower milk production growth, India's output of key dairy commodities is expected to increase in 2027.
The USDA forecasts:
- Butter production: 7.6 MMT, up 2.2%.
- Skimmed Milk Powder (SMP): 810,000 MT, up 2.5%.
- Fluid milk production: 226.5 MMT, up 2%.
However, higher domestic prices and tighter supplies are expected to limit export opportunities. India's SMP exports are forecast to decline by around 50% to approximately 7,000 MT in 2027 as domestic demand absorbs a greater share of available supplies.
What the Forecast Means for India's Dairy Industry
The projected slowdown raises important questions for dairy cooperatives, private processors, feed manufacturers and milk producers.
For farmers, the availability and affordability of quality feed and fodder will be critical to maintaining milk yields. For processors, slower supply growth could increase procurement competition and put pressure on operating margins.
The outlook also reinforces the importance of climate-resilient dairy farming, better fodder management, silage production, efficient feed utilisation and improved animal health services.
Climate Resilience Will Shape Dairy Growth
India is expected to remain the world's largest milk producer, but the 2027 forecast highlights a key challenge: sustaining production growth amid increasing climate uncertainty.
With domestic demand continuing to expand, the industry's ability to improve animal productivity and strengthen feed and fodder security will play a decisive role in maintaining supply stability.
Source: Read full story here 01 Nov, 2026 Edited and Reported by
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