Milk Production and Trade flows Outlook (2025)-FAO
Global Milk Production
Asia
Asia remains the key driver of global milk production growth. Herd expansion and productivity improvements in Bangladesh, India, and Pakistan are boosting output, helping Asia offset falls in other regions. China, however, faces a slowdown due to low farm-gate prices and persistent cost pressures, leading to output constraints .
America
Strong growth is expected across the Americas. Brazil and Mexico will see substantial increases, while Argentina recovers from previous downturns. The United States also contributes to the upswing in global milk production .
Europe & Oceania
Production growth in Europe and Oceania is expected to be modest overall, with some countries experiencing slight gains and others slight declines, resulting in a relatively stable regional output .
Africa
In Africa, production is likely to see a marginal decline due to rising input costs and conflict-related disruptions in select areas .
Global Total
Collectively, global milk production is forecast to reach 992.7 million tonnes in 2025, representing a 1.0% increase over the previous year—marking a second consecutive year of modest production growth .
Global Dairy Trade Flows
Volume Trends
Global dairy trade (in milk-equivalent terms) is expected to contract by approximately 0.8% in 2025 .
Importers
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China is projected to increase imports significantly due to sustained industrial demand and weaker domestic production .
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Reduced demand is anticipated from improving regional production in Africa, Latin America & the Caribbean, and the Near East, which could offset some of China’s demand bump .
Exporters
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European Union, United States, and Saudi Arabia are expected to export less.
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This drop may be partially compensated by increased shipments from Iran, New Zealand, and Uruguay, helping rebalance market flows .
Price Implications
The trade landscape is set against a backdrop of strong prices for high-value dairy products (butter, cheese, whole milk powder), although skim milk powder remains price-pressured due to abundant supply .
Risks and Uncertainties
Ongoing or new trade policy disruptions—including tariffs, sanctions, or geopolitical conflict—pose significant risks to projected trade flows. Close surveillance is warranted to assess impacts on market stability .
Regional Summary Table
| Region | Production Outlook | Trade Flow Highlights |
|---|---|---|
| Asia | Strong growth (Bangladesh, India, Pakistan) offsetting China decline | Significant import demand from China |
| Americas | Brazil, Mexico, Argentina, and the US underpin global production rise | Export capacity stable; global market share maintained |
| Europe & Oceania | Stable to marginal gains; balanced outputs | Export decline from EU; NZ boosts exports |
| Africa | Slight production drop | Reduced imports due to improved domestic output |
Industry Insight
Global milk production is set to grow steadily in 2025, driven by Asia and the Americas. However, dairy trade volumes face a mild contraction. While China’s rising import demand could rebalance flows, supply improvements in other regions and possible policy disruptions create a complex, evolving trade environment. Stakeholders should monitor regional production trends and trade developments to position inventory and market strategies effectively.
Source : Dairynews7x7 June 23rd 2025 FAO Food outlook