FAO says volume up for Asian dairy in 2024

Credit: FAO
International dairy product prices, measured by the UN’s FAO Dairy Price Index (DPI), averaged 128 in 2024, registering a total increase of 20.4 points (17.2%) from the beginning of the year. The index rose continuously month-on-month from January to October, except for April.
Much of the increase in dairy prices in 2024 is underpinned by constrained exportable availabilities in some leading exporting regions, geopolitical tensions impacting supply chains (especially in transportation and logistics) and anomalous weather conditions affecting major producers, mostly in the first part of the year.
From January to October, international butter price quotations rose by 35.1% (57.6% higher than the same period of 2023), registering the all-time peak in October 2024, since 2005. This increase reflects robust demand for medium-term deliveries amid tighter inventories in Western Europe and seasonally declining production in Oceania, especially in the first half of the year.
International cheese prices increased by 17.2% during the same period, principally driven by higher purchases by leading global importers and rising food service demand in the northern hemisphere amid tight supplies.
Whole milk powder (WMP) prices also increased significantly (11%) from January to October, as purchases by main importers in Southeastern Asia and the Near East and North Africa (NENA) region remained robust, despite a slowdown in the pace of imports from China, the world’s largest WMP importer. World skim milk powder (SMP) prices also increased, yet moderately (1.7%) from January to October 2024, underpinned by increased purchases by countries in the NENA region.
World milk production is forecast to increase by 1.5 % to slightly under 981 million tonnes in 2024, following a similar rise in 2023. The growth is expected to be sustained by a notable volume expansion in Asia, supplemented by increases in Europe, South America, Oceania, Central America and the Caribbean. However, the expansion stemming from these regions will likely be partially offset by slight anticipated contractions in Africa and North America.
In Asia, milk output is pegged at nearly 459 million tonnes, up 2.7% from 2023, principally sustained by output increases in India, Pakistan and China, the three largest milk producing countries in the region. Milk output in India, the largest producer in Asia, is projected to increase to 243 million tonnes in 2024, up 2.8% from 2023, or a slightly over six million tonnes; this growth rate is favoured by expectation of higher milk prices, normal monsoonand fodder availability, absence of major diseases outbreak and increasing milk cow numbers.
Pakistan’s milk output is anticipated to expand by 3%, in line with previous year’s growth and is mainly driven by rising milk cow numbers. Meanwhile, milk output in China is forecast at 45 million tonnes, up 2.9% year-on-year. This rise is supported by more efficient, large-scale dairy farms with higher milk yields. However, counterbalancing the growth, there is a possible decline in cow inventories and contributions from small-scale dairy farms, as some farms exit the dairy sector due to financial constraints.
In addition, several countries are anticipated to sustain moderate milk output expansions in 2024 – including Bangladesh, Türkiye, Uzbekistan and the Islamic Republic of Iran, among others – mainly because of rising dairy cow numbers, investments in the dairy sector and productivity gains, despite still high farm operational costs, due to rising input prices, mostly feed prices. Meanwhile, milk output in Japan and the Republic of Korea may decrease partially, reflecting labour shortages, rising costs of imported concentrated feed and lower consumer demand.
In Europe, milk output is forecast at nearly 235 million tonnes, up marginally (0.6 %) from 2023. This rise reflects expected output increases in the European Union, the Russian Federation and Belarus but is partially offset by possible drops in Ukraine and the United Kingdom. In the European Union, higher milk yields will likely increase milk output marginally (0.5 %) and compensate for declining milk cow numbers and unfavourable weather conditions in Northwestern regions (Ireland, the Netherlands and Germany) during spring and summer.
In the Russian Federation, milk output is forecast to increase by 2%, driven by government support, overall financial performance of the sector and stable milk prices supporting the recovery in consumer purchasing power. Milk output in Belarus will likely expand further (2.5%), albeit slowly, due to rising milk cattle numbers, higher yields and stable market access to the Russian Federation.