Rabobank reports global dairy trade expansion as trade flows shift

GLOBAL – According to Rabobank, the global dairy trade grew 11% between 2017 and 2025, increasing from 91.1 billion kg in liquid milk equivalents (LME) to 101.2 billion kg.

The most significant occurred in 2022, when a nearly 4% decline in New Zealand milk production rippled through global trade and pricing.

Growth later reverted to its longer-term trend of around 2%, with a stronger 5% increase in 2025 compensating for weak performance in 2024.

The EU remains the world’s largest dairy exporter, shipping 27.5 billion kg of LME in 2025 (excluding intra-EU trade).

This gives the bloc a commanding 27% share of global exports, but its lead is slowly slipping. Back in 2017, the EU held closer to 30%, highlighting a gradual erosion of its dominance.

Meanwhile, New Zealand continues to be the largest single-country exporter, holding a 22% market share. Across the Atlantic, the Americas are clearly on the rise.

The USA, in particular, has been building momentum, expanding its share of export volumes from 11.3% in 2017 to 13.5% in 2025.

Smaller players are also gaining ground. Argentina and Uruguay combined now account for 4.3% of global exports, a noticeable increase from 3.0% eight years ago.

Together, these shifts point to a more competitive global market, where the EU still leads, but no longer as comfortably as before.

Global dairy demand is shifting from China toward emerging growth hotspots

On the demand side, China remains the heavyweight importer, with 11.7 billion kg of LME entering China, Hong Kong, and Macau combined.

However, the story behind the numbers is changing. Since peaking in 2021, Chinese imports have been on a steady downward trend.

The decline is particularly striking in key categories such as liquid milk, cream, and milk powders (both whole and skimmed), where imports have halved over the past four years on the back of stronger domestic production and weaker demand.

This marks a significant shift in global demand dynamics, forcing exporters to look elsewhere for growth. As China’s demand softens, other regions are stepping in to fill the gap. Saudi Arabia, for example, is steadily increasing its dairy imports.

With limited domestic production capacity, which is focused largely on fresh dairy, the country is structurally dependent on imports of products such as cheese, milk powders, and evaporated milk.

Rapid population growth, ongoing urbanization, and rising incomes are all fueling consumption, while local production struggles to keep pace. This dynamic is not unique to Saudi Arabia.

Similar patterns can be observed across the Gulf, particularly in the United Arab Emirates and Oman, where structural reliance on imports is also increasing.

This growing dependency adds another layer of significance to geopolitical risks in the region, making developments around the Strait of Hormuz increasingly critical for global dairy flows.

In Southeast Asia, the picture is more mixed. Some countries, such as Malaysia and Thailand, are showing solid and consistent import growth, reflecting expanding middle classes and stronger dairy consumption.

Others, including Vietnam and Indonesia, are developing at a slower pace, resulting in a more fragmented and uneven growth pattern across the region.

Meanwhile, Brazil is emerging as one of the most dynamic import markets. Dairy imports have surged since 2022, rising from 1.3 billion kg of LME to 2.3 billion in 2025.

This sharp increase was largely driven by higher demand for cheese and milk powders, underlining Brazil’s growing role in global dairy trade and its increasing reliance on imported products to meet domestic demand.

Liquid milk: China’s retreat reshapes global trade flows

The story of liquid milk over recent years is, in many ways, a story about China pulling back and Europe feeling the impact.

Since peaking in 2021, European exports of liquid milk and cream have steadily declined, falling from 1.53 billion kg to 1.24 billion in 2025.

At the heart of this shift lies China. Once a booming destination for European milk, the country has sharply reduced its imports. Shipments from the EU have dropped dramatically in recent years, from 750,000 metric tons in 2021 to just 250,000 in 2025.

While European volumes have fallen sharply, New Zealand’s exports have remained remarkably stable, allowing it to quietly overtake Europe and claim the No. 1 position in China from 2024 onward.

For Europe, however, this was not the end of the story. Losses in China were partially offset much closer to home. The UK has emerged as a key growth market, with imports rising from roughly 100,000 metric tons before 2020 to 350,000 metric tons today.

Much of this trade flows smoothly across the Irish/UK border, with Ireland acting as the UK’s principal supplier, supported by the unique trading arrangements around the Irish border.

Strip out the effects of both China and the UK, and a more stable trend becomes visible: EU exports of liquid milk and cream are still growing at around 2% per year. Beneath the headline volatility, a steady core of demand remains intact.

A similar pattern of steady, regional trade can be seen in yogurt and kefir. These products, constrained by their short shelf life, tend to travel short distances.

As a result, global trade is shaped less by long-haul exporters and more by neighbouring markets. Even so, exports are gradually expanding, averaging 2% annual growth, with a notable acceleration to 7% in 2025 – a sign of rising consumer interest in fermented dairy.

The EU dominates this segment, exporting 592,000 metric tons in 2025, with 60% destined for the UK, within a global market of 3.8 million metric tons.

Milk powders: Trade growth remains subdued

In contrast to liquid dairy, the powder segment tells a story of limited growth and shifting competitive dynamics. Exports of skimmed milk powder (SMP) edged up by just 0.5% in 2025 , a modest increase that falls short of the growth in milk availability across major exporting regions.

This subdued performance is not new; rather, it reflects a longer-term pattern of restrained growth in global SMP trade. Within this landscape, the EU and UK have managed to increase their share in global exports, supported by stronger milk supply.

Meanwhile, the US is moving in the opposite direction. Despite increasing its share in global dairy exports in general, its SMP exports continue to decline at a steady 6% per year.

The most striking export losses are visible in Southeast Asia, where countries are increasingly turning to New Zealand and Europe for their SMP supply. Mexico remains an anchor market for the USA, but elsewhere, its position in SMP exports is gradually eroding due to uncompetitive pricing.

The market for whole milk powder (WMP) mirrors this subdued pace of growth, but with a very different competitive structure. Here, New Zealand remains firmly at the center, accounting for 53% of global exports in 2025, a share that has remained remarkably stable over time.

By contrast, the EU has steadily retreated from this segment. Exports have fallen sharply from 387,000 metric tons in 2017 to just 172,000 in 2025, a decline of more than 50%. This is not simply a loss of competitiveness; it reflects a strategic choice.

European processors are increasingly directing milk toward higher-value products such as cheese, butter, and SMP, where returns are more attractive. The space left behind has not remained empty.

Argentina and the UK have stepped in, expanding their presence in global WMP markets.

Another notable trend is the sharp decline in sweetened whole milk powder (HS 040229), with global exports down nearly 40% since 2017, indicating weakening demand for this more niche product category.

Butter: US exports drive surge in global trade

After several years of relative stability, the global butter market experienced a jolt in 2025. Since 2018, annual trade volumes had hovered around 2 million metric tons, but a surge in supply – particularly from the US – pushed volumes up sharply to 2.23 million metric tons, a 9% increase compared to 2024.

The driver behind this jump is clear: The USA has emerged as a major force in butter exports. In just one year, USA exports nearly tripled, rising from 45,000 metric tons in 2024 to 123,000 in 2025.

This surge is striking not only in relative terms, but also in absolute scale, outpacing the export gains seen from traditional heavyweights like New Zealand (+44,000 metric tons in 2025 versus 2024) and Argentina (+19,000).

This expansion reflects ample domestic availability in the US, which led to lower prices relative to other regions. In contrast, European exports remained largely flat, despite having around 1.7% more milk available.

This suggests that additional milk solids in Europe continue to be channeled into other product categories rather than butter, reinforcing the region’s strategic focus on value optimization.

Whey: A quiet market with a powerful value story

At first glance, the global whey market appears almost uneventful. Volumes have remained remarkably even over the years, hovering around 3.5 million metric ton annually, showing little of the dynamism seen in other dairy categories.

Even in 2025 – a year of stronger volatility in other dairy markets – shifts in whey trade flows were relatively modest. Over the past two years, the US has ceded some ground, while the UK and Argentina gained share.

But focusing only on volumes misses the real story. The true momentum in whey lies in its value, not its size. Prices began to rise in 2025 and accelerated their climb into 2026.

This swell is being driven by a renewed appreciation for whey protein, which has moved far beyond its traditional uses.

It is now firmly embedded in sports nutrition and increasingly tied to weight management and the rise of weight-loss medications, where high-protein diets play a central role. Whey may look stable on paper, but beneath the surface, it is becoming strategically more valuable than ever.

Cheese: The undisputed engine of dairy trade

If one product defines the story of global dairy trade over the past decade, it is undoubtedly cheese. Since 2017, cheese has delivered consistent, strong growth, cementing its position as the standout performer in the dairy complex.

By 2025, global cheese trade had reached 8.96 billion kg, marking an impressive 40% increase compared to 2017. This translates into a healthy compound annual growth rate of 3.3%, but the pace has recently accelerated even further.

Between 2024 and 2025, growth doubled, fueled by ample milk supply in key exporting regions and robust global demand. Certain exporters have capitalized on this trend particularly well.

Both Argentina and the USA have doubled their cheese exports since 2017, with the US firmly establishing itself as the second-largest exporter globally after the EU+UK.

The EU tells a slightly different but equally compelling story. Despite milk production increasing by just 5% since 2017, the EU has grown its cheese production by 9% and exports by 12%.

This highlights a clear strategic shift: More milk is being channeled into cheese, reflecting its strong value proposition. This development also underscores the enduring popularity of European cheeses, both at home and across global markets.

Casein: Steady growth in a balanced market

Compared to the headline-grabbing performance of cheese, the casein market offers a picture of quiet stability. Trade volumes grew by 1.4% in 2025, closely tracking the longer-term growth trend of around 1.1% annually.

Competition at the top remains tight. New Zealand and the EU continue their close contest for the position of leading exporter, with the EU narrowly taking first place in 2025.

Both regions command just over one-third of the global export market, reflecting a relatively balanced competitive landscape. On the demand side, the US and China remain the dominant importers, anchoring global trade flows.

While casein may not grab headlines, its steady expansion and balanced market structure make it a reliable and resilient component of the global dairy portfolio.

To receive our email newsletters with the latest news and insights from Africa, the Middle East and around the world, SUBSCRIBE HERE.