Australia’s dairy trade slows amid lower milk production

Australian dairy exports showed positive results up to August, increasing by 4.28%, equivalent to 8.5 million kilo in liquid milk equivalent (LME).The only significant declines were recorded for butter and butteroil, while strong absolute growth was observed for skim milk powder (SMP), milk, and infant formula. Australia Exports YTD August Product YTD Aug '24 YTD Aug '25 ∆ ∆% 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% As of August, Australian dairy imports continued to show negative momentum. Year-to-date import volumes fell by 9.02%, totalling approximately 178 million kilo in LME. This steady decline reflects an overall unfavourable trading environment. Australia Imports YTD Aug '25 Product YTD Aug '24 YTD Aug '25 ∆ ∆% Butter 9.057 6.252 -2.805 -30,97% Butter 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% Whey 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% One of the factors behind the weak import performance may be the country’s unfavourable milk production. Year-to-date to August, production was down by 2.90%, or 147 million kilo. Australia milk production YTD August 2025 - Liters Month 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% Any stocks available as of August were also reduced significantly, by 316.5 million kilo in LME. It remains to be seen what impact the recent sale of Fonterra’s consumer business to Lactalis will have on the market.