Australian dairy market marked by stronger trade

Australian dairy exports strengthened in August, rising by 4.29%, equivalent to an additional 8.5 million kilos in liquid milk equivalent (LME). In terms of commodity, exports increased by 6.29%, or 2.572 tons. The growth was driven by higher shipments across most dairy categories, which more than offset weaker performance in butter and butteroil exports.These two categories declined significantly due to lower demand from China and South Korea. Australian Dairy exports August 2025 (tons) Product 2024 2025 ∆ ∆% Butter 1.377 680 -697 -50,62% Butter Oil 233 153 -80 -34,33% Cheese 12.191 12.539 348 2,85% SMP 10.123 10.865 742 7,33% WMP 4.548 4.744 196 4,31% Whey 707 903 196 27,72% Milk 10.563 12.016 1.453 13,76% I/F 1.004 1.394 390 38,84% Lactose 175 199 24 13,71% Total 40.921 43.493 2.572 6,29% Despite the positive monthly result, the overall export trend remains subdued. Year-to-date (YTD) exports up to August were down by 9.02%, totaling approximately 178 million kilos in LME. In terms of commodity tonnage, the decline was 5.18%, or 20.243 tons. Australian Dairy Exports YTD August 2020 (tons) Product 2024 2025 ∆ ∆% Butter 9.057 6.252 -2.805 -30,97% Butter Oil 2.605 2.745 140 5,37% Cheese 107.905 110.523 2.618 2,43% SMP 109.483 97.886 -11.597 -10,59% WMP 34.172 33.981 -191 -0,56% Whey 19.404 10.612 -8.792 -45,31% Milk 91.942 95.116 3.174 3,45% I/F 9.070 10.708 1.638 18,06% Lactose 6.987 2.559 -4.428 -63,37% Total 390.625 370.382 -20.243 -5,18% This ongoing contraction reflects a challenging global trading environment, although it aligns with the reduction in national milk production over the same period. Australia milk production YTD August 2025 (kilo) Product 2024 2025 ∆ ∆% January 727.200.000 708.200.000 -19.000.000 -2,61% February 601.400.000 572.400.000 -29.000.000 -4,82% March 596.100.000 595.900.000 -200.000 -0,03% April 591.800.000 594.000.000 2.200.000 0,37% May 645.100.000 620.300.000 -24.800.000 -3,84% June 596.300.000 565.100.000 -31.200.000 -5,23% July 579.400.000 556.300.000 -23.100.000 -3,99% August 681.900.000 661.500.000 -20.400.000 -2,99% Year to date August 5.019.200.000 4.873.700.000 -145.500.000 -2,90% Season to date August 1.261.300.000 1.217.800.000 -43.500.000 -3,45% Throughout the year, milk flows have been pressured by adverse weather conditions in key dairy regions and persistently tight farm margins. Continued unfavorable weather, farm exits, smaller herds, and constrained profitability are expected to affect production into the new season. As a result, national milk output for 2025/26 is forecast to fall by between 0% and 2%.Imports from Chinese buyers have improved as domestic milk production weakens and stockpiles are drawn down. Demand from Southeast Asia and the Middle East also remains solid. On the macroeconomic front, the global outlook has softened amid growing policy uncertainty and shifting government priorities. The International Monetary Fund projects global economic growth to slow slightly to 2.8% in 2025, although import demand across advanced economies is still expected to rise.Australian dairy imports surged in August, increasing by 24.84%, or 19 million kilos LME. In commodity terms, imports grew by 27.67%, or 3.616 tons. Australian Dairy Imports August 2025 (tons) Product 2024 2025 ∆ ∆% Butter 1.116 2.581 1.465 131,27% Butter Oil 460 1.259 799 173,70% Cheese 6.301 8.561 2.260 35,87% SMP 774 342 -432 -55,81% WMP 3.731 3.371 -360 -9,65% Whey 685 569 -116 -16,93% Total 13.067 16.683 3.616 27,67% This strong monthly gain follows several months of weaker import activity across key product categories. As a result, YTD August import volumes are now 2.30% higher than a year earlier, representing an additional 18 million kilos LME. In terms of tonnage, imports rose by 3.13%, or 4.177 tons. Australian Dairy Imports YTD August 2020 (tons) Product 2024 2025 ∆ ∆% Butter 20.463 19.146 -1.317 -6,44% Butter Oil 5.760 7.994 2.234 38,78% Cheese 67.682 73.259 5.577 8,24% SMP 8.772 6.822 -1.950 -22,23% WMP 26.884 24.315 -2.569 -9,56% Whey 3.705 5.907 2.202 59,43% Total 133.266 137.443 4.177 3,13% By August, Australian dairy imports had firmly returned to positive territory, underscoring the market’s continued reliance on overseas supply amid domestic production constraints.