Global dairy market and production shifts

The global dairy sector is experiencing shifts in production focus and market dynamics. In Australia, a structural decline in milk production—with available milk protein falling by approximately 30% since 2015—has prompted an industry transition from a ‘cheese-centric’ model toward ‘protein optimisation.’ This involves directing milk into premium segments like nutritional supplements and high-protein beverages. Concurrently, the plant-based sector has introduced high-protein dairy-free alternatives in the Australian market.

On a global scale, dairy markets remain firm due to sustained demand for milk proteins. While production has increased in Argentina, Uruguay, and the United States, China has seen a decline. New Zealand reported record milk collections in July, though analysts are monitoring potential supply risks from El Niño and heatwaves. Additionally, New Zealand farmers are increasingly adopting dairy beef production, using beef genetics for approximately 12% of matings to improve the value of surplus calves.