According to the United States Department of Agriculture (USDA), global fluid milk production reached 666.6 million metric tons (mmt) in 2023, a 1.14% increase compared to the 659.1 mmt recorded in 2022. India emerged as the leading contributor, accounting for approximately 31% of the total production, yielding 207.1 mmt, a 2.27% year-on-year (YoY) growth. The European Union (EU) stood as the second-largest producer with 149 mmt (+0.34% YoY), followed by the United States (US) with 102.9 mmt (+0.19% YoY), China with 42.2 mmt (+4.46% YoY), and Russia with 32.3 mmt (+0.62% YoY).
Figure 1: Global Fluid Milk Production from 2019 to 2024
Global fluid milk production has exhibited consistent growth in recent years, portraying a promising outlook for the industry. Projections suggest that global fluid milk production could surpass 674 mmt in 2024, a 1.1% YoY increase. This sustained expansion is driven by various key factors such as rising consumer demand, advancements in technology facilitating the adoption of more efficient and sustainable production practices, and evolving consumer preferences toward healthier diets.
Despite the anticipated global increase in fluid milk production, there are expectations of variability across key regions. The USDA expects India’s milk production to reach approximately 212.7 mmt in 2024, a 2.7% YoY growth, attributed to a higher number of milking cattle. Furthermore, the Indian government has intensified policy-making efforts aimed at enhancing animal husbandry practices and bolstering the dairy sector's sustainability.
In the US, fluid milk production is projected to increase by 0.7% YoY to approximately 103.62 mmt in 2024, driven by reduced feed costs and strengthening milk prices. Additionally, US milking cow numbers are expected to stabilize in 2024, while milk per cow output is forecasted to continue growing, albeit at a slower pace than historical averages.
Conversely, EU fluid milk production is anticipated to experience a slight decline of 0.13%, reaching approximately 148.8 mmt in 2024, primarily due to a continued decrease in the cow herd. This negative outlook is also attributed to the persistent decrease in farmgate milk prices, coupled with consistently elevated production costs that have eroded farmers' profit margins. Moreover, certain animal welfare regulations in EU member states have contributed to the declining cow herds. For example, the Dutch government's nitrogen emissions cap and the Irish government's proposed voluntary payment scheme to encourage dairy cow slaughter introduce additional complexities, potentially leading to further market consolidation and closures among smaller producers.
In New Zealand, one of the top milk-producing countries, milk production is projected to total 21.2 mmt in 2024, a 1.4% decrease compared to the 2023 estimate of 21.5 mmt. This decline in production is primarily attributed to several factors, including the influence of El Niño weather patterns, a reduction in farmgate milk prices, ongoing on-farm inflation, and a shrinking dairy herd. It is worth noting that New Zealand's pastoral-centered production model heavily depends on adequate rainfall levels to establish feed reserves for the spring season. As a result, predicted dry conditions during the summer months (December to February) are expected to impact pasture growth in New Zealand, leading to reduced accumulation of feed reserves in 2024, particularly on the North Island, which accounts for 57% of the country's dairy herd.