FAO Mid-Year Outlook: Global Milk Production to Grow Slightly in 2025

Strong Asian Output to Offset Regional Declines Amid Mixed Global Trends

According to mid-year estimates from the Food and Agriculture Organization (FAO), global milk production is forecast to reach 992.7 million tonnes in 2025 — a 1.0% increase from the previous year and the second consecutive year of modest growth.

🔹 Asia Drives Global Expansion

Growth is expected to be led by Asian countries, particularly Bangladesh, India, and Pakistan, where gradual gains in productivity and ongoing herd expansion are anticipated to sustain upward momentum.

These increases are forecast to more than offset a projected decline in China, where continued cost pressures and falling farmgate prices are curbing production growth.

🔹 Recovery in the Americas, Stability in Europe and Oceania

Strong gains in Brazil and Mexico, coupled with a recovery in Argentina and the United States, are expected to support broader growth across the Americas.

In Europe and Oceania, milk output is projected to remain stable, with modest national-level increases balancing out declines elsewhere.

In contrast, milk production in Africa is set to decline slightly, hindered by rising input costs and conflict-related disruptions in some areas of the continent.

🔹 Global Dairy Trade: Slight Decline Forecast

Global dairy trade, measured in milk equivalent, is expected to contract by 0.8% in 2025. A rebound in Chinese imports, fueled by rising demand in the food industry and weaker domestic production prospects, may only partially offset expected declines in Africa, Latin America and the Caribbean, and the Near East, where regional production is recovering.

Export volumes from the EU, Saudi Arabia, and the United States are likely to decline, though this may be balanced by increased shipments from Iran, New Zealand, and Uruguay.

Persistent uncertainty in global trade policy remains a key risk factor, warranting close monitoring over the coming months.

🔹 Prices Continue to Rise, Driven by Butter and Cheese

International dairy prices continued to rise in early 2025, led by record-high butter prices and strong cheese quotations.

In May, the FAO Dairy Price Index averaged 153.5 points, up 21.5% year-over-year, though still 3.0% below its all-time high reached in June 2022.

• Butter and cheese prices drove overall increases, supported by strong global demand and tight supplies, particularly in Oceania and the European Union.
• Whole milk powder (WMP) prices also rose significantly, driven by firm demand in the Near East and North Africa.
• In contrast, skimmed milk powder (SMP) faced slight downward pressure due to ample supply in Europe and sluggish demand growth in Asia.