The report identifies Asia as the primary driver of this growth, with India, Bangladesh and Pakistan leading the way. These countries are expected to see continued herd expansion and gradual improvements in productivity, more than compensating for a projected decline in China, where falling farmgate prices and sustained cost pressures are dampening output growth.
Global milk production is projected to reach 992.7 million tonnes in 2025, reflecting a 1% year-on-year increase and marking the second consecutive year of modest expansion, according to the latest biannual report from the United Nations Food and Agriculture Organization (FAO) on the world food market.
The report identifies Asia as the primary driver of this growth, with India, Bangladesh and Pakistan leading the way. These countries are expected to see continued herd expansion and gradual improvements in productivity, more than compensating for a projected decline in China, where falling farmgate prices and sustained cost pressures are dampening output growth.
In the Americas, strong production gains are anticipated in Brazil and Mexico, alongside a recovery in Argentina and the United States, contributing to a broader regional rebound. In contrast, Europe and Oceania are expected to see stable production levels, with minor increases amid divergent national trends. Africa, however, is likely to witness a slight decline, as rising input costs and conflict-related disruptions in some regions hinder production.
On the trade front, global dairy trade, measured in milk equivalent, is forecast to contract by 0.8% in 2025. While a rebound in Chinese imports – driven by growing demand from the food industry and a lower domestic production outlook – may offer some support, this is unlikely to fully offset anticipated import declines in Africa, Latin America and the Caribbean, and the Near East, where regional production is improving.
Among exporters, declining shipments from the European Union, Saudi Arabia, and the United States are expected to be partially offset by higher exports from New Zealand and Uruguay. The FAO also warns that uncertainty in global trade policy remains a key factor to monitor in the coming months, given its potential impact on market dynamics.
International Dairy Federation (IDF) in its World Dairy Situation 2024 report released in March 2025, had said that The Asian market has firmly established itself as a formidable force in the global dairy industry, with China and India at the forefront. The two countries collectively account for a staggering 50% of the world’s milk consumption, significantly impacting global dairy dynamics. It expected a 2.1% increase in annual milk production, reaching a remarkable 964 million tons. This surge is predominantly driven by China and India, which have bolstered their positions as two of the top five producers of cow’s milk globally, buoyed by robust domestic demand.
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Meanwhile, international dairy prices continued to rise in early 2025, led by record-high butter prices and firm cheese quotations. In May, the FAO Dairy Price Index averaged 153.5 points, up 21.5% year-on-year, although still 3% below its peak in June 2022. Price gains were most pronounced in butter and cheese, supported by strong global demand and tight supplies, particularly in Oceania and the EU. Whole milk powder prices also saw a notable increase, driven by steady demand from the Near East and North Africa. In contrast, skim milk powder prices experienced slight downward pressure, reflecting ample supplies in Europe and slower demand growth in Asia.
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