Global milk production among leading dairy exporters is headed for growth in 2025, but will it be sufficient to offset rising dairy demand? That’s the top-of-mind question for U.S. dairy producers and analysts alike. USDA’s most recent semi-annual Dairy: World Markets and Trade report, released in early December, predicts that milk production among the world’s top-five dairy exporters will grow by 0.4% in 2025, after remaining virtually unchanged in 2024.
Monica Ganley, analyst at the Daily Dairy Report and principal of Quarterra, an agricultural consulting firm in Buenos Aires, said a 0.4% global year-over-year increase in milk production might not be enough to satisfy growing dairy demand. “Milk production gains will be critical if the industry hopes to satisfy global dairy demand, which is likely to rise in 2025 as the world population grows and improving economic conditions promote the consumption of animal products,” Ganley said.
U.S. dairy producers will drive the projected global increase, with a 0.7% increase this year, compared to 2024. USDA projects that U.S. milk production will rise to 228 billion pounds on improved margins and a larger milking herd. “Improvements in milk component levels this year will boost dairy product production even further from available milk supplies,” Ganley noted.
Oceania output is also poised for gains next year, and while the region’s percentage increases will be larger than the 0.7% gain in the United States, the overall volume will be smaller. USDA predicts that Australia’s output will increase 1.1%, while production in New Zealand will climb 0.9%.
“High milk prices and favorable weather conditions in New Zealand have spurred expansion, but the dairy industry in New Zealand continues to face structural challenges that will limit growth potential over the long term,” Ganley said.
Milk production in the European Union, however, is expected to remain under pressure, with USDA predicting a 0.2% year-over-year decline. “Stubbornly high input costs and environmental regulations have discouraged investment in Europe’s dairy sector and stifled growth,” Ganley noted. “However, the impact has been uneven and while some countries in the bloc are still expanding, total European milk production is expected to struggle in coming years.”
Lastly, Argentina is expected to post the largest year-over-year percentage gain in milk production next year of 4.7%. “After a dismal 2024, a dramatically improved macroeconomic outlook for the country has facilitated new investment and optimism in the dairy sector,” she added. And that should boost milk production.
