How would the worldwide dairy business appear to be in 2025? We round-up the newest dairy and merchandise annual information revealed by the USDA to get a glimpse of what’s to return in 2025.
Sturdy world demand for dairy is predicted to stay in place as producers search to enhance manufacturing efficiencies and enhance milk solids. In markets such because the the EU, New Zealand and Australia, a shrinking dairy herd poses a problem, along with local weather and seasonal differences.
New Zealand
In New Zealand, milk manufacturing is forecasted to drop in 2025 to 21.3 million metric tons (MMT), down from the five-year common of 21.5 MMT.
Export focus
Simply over 2% of New Zealand’s milk is consumed domestically.
Producers’ latest shift from powder to recent dairy corresponding to butter and cheese has led to a lower in powder exports, with the share of WMP exports – the most important dairy commodity product made within the nation – down from 45% in 2019 to 41% in quantity phrases in 2024. Nevertheless, an virtually 4% year-to-date enhance in WMP exports over 2023 means that elevated demand in markets, corresponding to UAE and Bangladesh, has offset the lower in exports to China (-5.5%) and Algeria (-18%).
On the identical time, producers have ramped up manufacturing of costly, speciality merchandise corresponding to toddler method, protein concentrates, lactoferrin and caseinates. Within the first eight months of 2024, exports for these merchandise mixed have been monitoring +13.8% YoY.
Australia
In Australia, milk manufacturing for 2025 is predicted to extend by 1.1% to eight.8MMT, following on 2.7% development for 2024. Milk consumption is predicted to rise, reversing a 5-year decline, although a lot of that milk is probably going to enter cheese manufacturing. Exports of SMP, WMP, and butter are forecast to average in 2025 after robust outcomes up to now in 2024.
Cheese manufacturing – a significant focus for dairies up to now decade – is predicted to return to 2023 ranges (375,000MT) after a drop in output in 2024. Exports are projected to say no to 150,000MT, down from 165,000MT in 2024.
Butter manufacturing can be anticipated to rise barely, with SMP and WMP anticipated to average in 2025.
China
China’s elevated milk manufacturing is creating ripples on the worldwide dairy commodities market. The biggest world dairy purchaser is importing much less dairy and, coupled with the nation’s declining start charges and elevated milk self-sufficiency, this development is unlikely to alter within the new 12 months. Imports of fluid milk, whey, butter, WMP and SMP are estimated to all decline in 2024; however cheese imports could keep flat over restricted home manufacturing.
An anticipated commerce warfare with the US may put US dairy within the crossfire once more, if China retaliates equally to final time when the nation hit US-imported milk and milk product with tariffs starting from 5% to 27.5%. China can be within the midst of an anti-subsidy investigation into European dairy merchandise; the probe is predicted to proceed by means of most of 2025 and could possibly be additional prolonged. Due to this, RaboResearch forecasts {that a} market impression isn’t probably till at the least 2026.
India, the world’s largest dairy producer, is about to proceed to develop its output in 2025, in accordance with USDA FAS information. Complete milk manufacturing is prone to rise to greater than 216mmt because of a rising herd measurement and elevated authorities backing for the sector, favorable climate circumstances and excessive milk costs. Coupled with rising disposable revenue and a rising inhabitants, consumption of milk, butter and SMP are all prone to enhance. In rural areas, it stays beneath official dietary suggestions.
International demand for cheese continues to develop at 2% per 12 months, in accordance with USDA FAS estimates, with the EU (43%) and the US (29%) being the most important shoppers but additionally producers, as proven within the desk beneath.
European Union
Cheese manufacturing is about to stay a key focus for EU dairy processors because the business decides which merchandise it ought to pool milk into, as fluid milk manufacturing is predicted to say no to 148.9MMT in 2024 from an estimated 149.3MMT a 12 months prior. Cheese manufacturing in the meantime is predicted to extend by 0.6% to 10.62MMT, however it will impression butter, nonfat dry milk (NFDM) and WMP manufacturing.
Whereas round half of EU-produced NFDM is exported, the USDA estimates a decline of seven.6% in 2024 from 2023 ranges resulting from decrease manufacturing and weaker Chinese language demand but additionally heavier competitors from the US and New Zealand.
WMP manufacturing is forecast to say no in 2024 by 3.9% and exports are additionally anticipated to drop beneath 2023 ranges as manufacturing is directed to the home market.
Butter manufacturing was forecast 2.1% beneath 2023 ranges resulting from restricted milk availability for butter and shopper tendencies negatively weighing on demand. Butter exports in 2024 are additionally anticipated to say no.
Earlier this month, the EU agreed an FTA with Mercosur that might provide a brand new route for powder exports – extra on this right here. In the meantime, necessities forming a part of the brand new Widespread Agricultural Coverage (CAP) and the EU Inexperienced Deal will stay in sharp focus for agrifood producers, significantly as extra funding in enhancing sustainability may negatively impression earnings.
The US
Within the US, milk manufacturing forecasts for each 2024 and 2025 have been revised up because of anticipated enhance within the dairy herd. In response to the latest USDA Nationwide Agricultural Statistics Service Milk Manufacturing report, the October milk cow herd was 9.365 million head, 10,000 greater than final October – the primary month since Might 2023 exhibiting a year-over-year enhance within the dairy herd measurement, although month over month, the herd had been growing since August 2024.
In 2025, the herd is forecast to proceed increasing by 30,000 head to 9.390 million, resulting in a rise within the 2025 milk manufacturing forecast of 0.3 billion kilos.
Primarily based on latest commerce information, the 2024 export forecast is elevated to 11.7bn lb (+0.1bn) on a milk-fat foundation resulting from greater anticipated cheese and butter exports. On a skim-solids foundation, the forecast is decreased by 0.1 billion kilos resulting from decrease anticipated exports of dry skim milk merchandise and dry whey exports on much less aggressive costs; although lactose exports are anticipated to extend.
The 2025 US dairy export forecast is projected at +0.1bn lb pushed by butter and cheese exports; however declines in dry skim milk product exports of round 0.4bn lb are additionally anticipated. In the meantime, the US is predicted to import extra cheese, butter and WMP, with 0.1bn lb will increase on each milk-fat and skim-solids foundation.
Adjusted 2025 value forecasts embody: cheddar cheese $1.800 (-9.5 cents), NDM $1.300 (+4.0 cents), dry whey $0.595 (+7.5 cents), and butter $2.685 (-7.0 cents).
These value changes have led to a lower within the 2025 Class III milk value forecast to $18.80 per cwt and a rise within the 2025 Class IV milk value forecast to $20.40 per cwt. The 2025 all-milk value forecast has been lowered to $22.55 per cwt. In the meantime, the 2024 all-milk value forecast has been lowered to $22.65 per cwt resulting from decreased 2024 Class III milk value and unchanged Class IV milk value forecasts.
See additionally: Trump’s trade and immigration policies could spell trouble for US dairy
