# Where does milk come from?

Source: Commodity Origins, https://commodityorigins.com/commodities/milk/ — data JSON: https://commodityorigins.com/data/commodities/milk.json — license CC BY 4.0 (upstream data keeps its license; see Sources below).

Milk comes mainly from India, which produced 135 million tonnes in 2024, 17% of the world's 788.6 million tonnes (FAOSTAT). United States (13%), China (5.2%) and Brazil (4.7%) follow; the top five together supply 44%. The biggest exporter of milk powders (HS 0402) is New Zealand (28% of world export value in 2024, CEPII BACI). The benchmark price, Milk, USDA Class III spot, United States, was $20.71/cwt in July 2026, down 3% from a year earlier (IMF PCPS). Milk is produced almost everywhere people keep cattle, because it is perishable and heavy and cannot travel far, so the map of production follows population and pasture rather than any comparative advantage in dairying.

*Raw cow's milk, most of it drunk or processed close to where it is produced; only powders, butter and cheese travel far.* Also called: raw milk, dairy, cow milk, milk powder, butter, cheese.

## Where does milk come from?

| Rank | Country | Production 2024 (tonnes) | Share |
|---|---|---|---|
| 1 | India | 135 million | 17% |
| 2 | United States | 102.5 million | 13% |
| 3 | China | 40.8 million | 5.2% |
| 4 | Brazil | 36.8 million | 4.7% |
| 5 | Germany | 33.8 million | 4.3% |
| 6 | Russia | 32.8 million | 4.2% |
| 7 | Pakistan | 24.8 million | 3.1% |
| 8 | France | 24.2 million | 3.1% |
| 9 | New Zealand | 21.5 million | 2.7% |
| 10 | Turkey (Türkiye) | 21 million | 2.7% |
| | Rest of world | 0 | 40% |
| | World | 788.6 million | 100% |

Source: FAOSTAT Crops and livestock products (QCL), 2024.

In 2024 India produced 135 million tonnes of raw cow milk, 17% of the world's 788.6 million tonnes (FAOSTAT). United States followed with 13%, then China (5.2%), Brazil (4.7%) and Germany (4.3%). The top five account for 44%, and 183 countries reported production with 40% coming from outside the top ten. Very few commodities on this site are as widely produced.

Two things about that table need saying. First, it counts cow milk only; buffalo milk, which is a large part of South Asian dairying and much higher in fat, is a separate FAOSTAT item, so India's total dairy output is understated here. Second, production and yield are very different stories. A herd in the United States, the Netherlands or Denmark produces several times as much milk per cow per year as one in India or Pakistan, so a country can rank high on volume through herd size rather than productivity.

Systems differ as much as yields. New Zealand and Ireland run seasonal, pasture-based systems where cows calve together in spring and milk production follows the grass curve, dropping to almost nothing in winter. The United States, the Netherlands and increasingly China run housed, year-round systems on conserved forage and concentrate feed. The first is low-cost and inflexible; the second is higher-cost and can supply fresh milk all year, which is why the two systems specialize in different products.

World output changed +20% over the ten years to 2024 and +0% on the previous year, growth driven mainly by rising Asian consumption.

## Who exports and imports milk?

Raw milk barely crosses borders; New Zealand, the European Union and the United States dominate the powder, butter and cheese trade that stands in for it.

### Exporters of milk and cream, concentrated or sweetened (powders) (HS 0402), 2024

| Rank | Country | Value (US$) | Share |
|---|---|---|---|
| 1 | New Zealand | $6.2 billion | 28% |
| 2 | United States | $2.1 billion | 9.6% |
| 3 | Netherlands | $2 billion | 9.1% |
| 4 | Germany | $1.6 billion | 7.4% |
| 5 | France | $1.1 billion | 5.1% |
| 6 | Belgium | $988.6 million | 4.5% |
| 7 | Australia | $958.5 million | 4.4% |
| 8 | Uruguay | $606.1 million | 2.8% |
| 9 | Ireland | $589.6 million | 2.7% |
| 10 | Argentina | $508.8 million | 2.3% |
| 11 | Poland | $476.7 million | 2.2% |
| 12 | Hong Kong | $378 million | 1.7% |
| 13 | Saudi Arabia | $320.6 million | 1.5% |
| 14 | Malaysia | $265 million | 1.2% |
| 15 | Sweden | $254.9 million | 1.2% |

### Importers of milk and cream, concentrated or sweetened (powders) (HS 0402), 2024

| Rank | Country | Value (US$) | Share |
|---|---|---|---|
| 1 | China | $2.7 billion | 12% |
| 2 | Algeria | $1.3 billion | 6.1% |
| 3 | Mexico | $1 billion | 4.7% |
| 4 | Saudi Arabia | $912.9 million | 4.2% |
| 5 | Netherlands | $910.9 million | 4.2% |
| 6 | Indonesia | $821.5 million | 3.8% |
| 7 | United Arab Emirates | $672.1 million | 3.1% |
| 8 | Brazil | $653.4 million | 3% |
| 9 | Germany | $632.7 million | 2.9% |
| 10 | Malaysia | $594.1 million | 2.7% |
| 11 | Philippines | $588.1 million | 2.7% |
| 12 | Belgium | $460.6 million | 2.1% |
| 13 | Singapore | $437.4 million | 2% |
| 14 | Italy | $437.3 million | 2% |
| 15 | Thailand | $432.3 million | 2% |

### Exporters of butter and other fats derived from milk (HS 0405), 2024

| Rank | Country | Value (US$) | Share |
|---|---|---|---|
| 1 | New Zealand | $2.9 billion | 23% |
| 2 | Netherlands | $1.8 billion | 14% |
| 3 | Ireland | $1.8 billion | 14% |
| 4 | Germany | $1 billion | 8.1% |
| 5 | France | $940.6 million | 7.3% |
| 6 | Belgium | $912.6 million | 7.1% |
| 7 | Denmark | $461.6 million | 3.6% |
| 8 | Poland | $440 million | 3.4% |
| 9 | India | $341.3 million | 2.6% |
| 10 | United States | $236.6 million | 1.8% |
| 11 | Finland | $210.8 million | 1.6% |
| 12 | United Kingdom | $186.6 million | 1.4% |
| 13 | Australia | $141.9 million | 1.1% |
| 14 | Iran | $124.2 million | 1% |
| 15 | Spain | $121.5 million | 0.9% |

### Importers of butter and other fats derived from milk (HS 0405), 2024

| Rank | Country | Value (US$) | Share |
|---|---|---|---|
| 1 | France | $1.5 billion | 12% |
| 2 | Netherlands | $968.2 million | 7.5% |
| 3 | China | $957.7 million | 7.4% |
| 4 | Germany | $876.5 million | 6.8% |
| 5 | United States | $850.2 million | 6.6% |
| 6 | Belgium | $626.2 million | 4.9% |
| 7 | Italy | $508 million | 3.9% |
| 8 | Saudi Arabia | $451.2 million | 3.5% |
| 9 | United Kingdom | $396.4 million | 3.1% |
| 10 | Spain | $278.5 million | 2.2% |
| 11 | Australia | $257.5 million | 2% |
| 12 | Canada | $235.9 million | 1.8% |
| 13 | Indonesia | $206.6 million | 1.6% |
| 14 | United Arab Emirates | $206.2 million | 1.6% |
| 15 | South Korea | $199.2 million | 1.5% |

### Exporters of cheese and curd (HS 0406), 2024

| Rank | Country | Value (US$) | Share |
|---|---|---|---|
| 1 | Germany | $6.6 billion | 15% |
| 2 | Italy | $5.7 billion | 13% |
| 3 | Netherlands | $5.6 billion | 13% |
| 4 | France | $4.2 billion | 9.4% |
| 5 | United States | $2.5 billion | 5.6% |
| 6 | Denmark | $2.4 billion | 5.3% |
| 7 | New Zealand | $1.7 billion | 3.8% |
| 8 | Ireland | $1.7 billion | 3.8% |
| 9 | Belgium | $1.4 billion | 3.1% |
| 10 | Poland | $1.3 billion | 3% |
| 11 | Greece | $1.1 billion | 2.4% |
| 12 | Austria | $980.4 million | 2.2% |
| 13 | United Kingdom | $914.3 million | 2% |
| 14 | Spain | $898.8 million | 2% |
| 15 | Switzerland | $812.7 million | 1.8% |

### Importers of cheese and curd (HS 0406), 2024

| Rank | Country | Value (US$) | Share |
|---|---|---|---|
| 1 | Germany | $6 billion | 13% |
| 2 | France | $3.1 billion | 7% |
| 3 | Italy | $2.8 billion | 6.3% |
| 4 | United Kingdom | $2.6 billion | 5.8% |
| 5 | Netherlands | $2.3 billion | 5.2% |
| 6 | Belgium | $2.1 billion | 4.6% |
| 7 | Spain | $2.1 billion | 4.6% |
| 8 | United States | $2 billion | 4.4% |
| 9 | Japan | $1.3 billion | 2.8% |
| 10 | Mexico | $1.1 billion | 2.4% |
| 11 | Saudi Arabia | $947 million | 2.1% |
| 12 | Sweden | $857.2 million | 1.9% |
| 13 | China | $854.9 million | 1.9% |
| 14 | Austria | $837.8 million | 1.9% |
| 15 | Poland | $788.7 million | 1.8% |

Source: CEPII BACI international trade database (HS22, V202601).

Raw milk barely crosses borders, and that is the single most important fact about dairy trade. It is roughly seven-eighths water, it spoils in days and it needs refrigeration, so shipping it any distance makes no economic sense. What travels instead is milk with the water removed and the shelf life extended: skim and whole milk powder, butter and butterfat, cheese, and whey and protein concentrates.

New Zealand was the largest exporter of milk powders (HS 0402) in 2024 with 28% of world export value, ahead of United States (9.6%), on world trade of $21.8 billion (CEPII BACI). China was the largest importer with 12%.

The result is a trade dominated by a few surplus regions, New Zealand, the European Union and the United States, selling into a long list of deficit ones across Asia, the Middle East, Africa and Latin America. New Zealand is the extreme case: it produces a small share of world milk but exports the overwhelming majority of what it makes, because its population is tiny relative to its herd. Read the export table as a map of surplus, not of dairying.

## What does milk cost?

- Milk, USDA Class III spot, United States: $20.71/cwt in July 2026; 12-month change -3%; 10-year change +36%; all-time high $29.16/cwt in July 2022; real high (2024 US$) $37.48/cwt in May 2004 (IMF PCPS).

Prices are monthly benchmark averages that lag the market; not investment advice.

### How it is priced

The series shown is Milk, USDA Class III spot, United States, which was $20.71/cwt in July 2026, down 3% from a year earlier (IMF PCPS). The unit is dollars per hundredweight, an American convention meaning per hundred pounds of milk. The nominal high was $29.16/cwt in July 2022.

Be clear about what that is: a United States domestic price, set under a federal milk marketing order system that classifies milk by end use. Class III is milk used for hard cheese, and its price is calculated from formulas based on the wholesale prices of cheese, whey and butterfat. It is a real and important price, and it is what American dairy futures settle against, but it is not a world price.

The international reference is the Global Dairy Trade auction, held twice monthly, where New Zealand and other suppliers sell whole milk powder, skim milk powder, butter and anhydrous milk fat to global buyers in an open bidding process. That auction is the closest thing dairy has to a world price discovery mechanism, and this site links to it rather than republishing its results. European prices are reported separately by the Commission's milk market observatory.

Farmers themselves are usually paid not for volume but for components: kilograms of milk fat and protein, adjusted for somatic cell count and bacterial quality. A cooperative that processes its members' milk typically pays an advance during the season and a final payment once products are sold, so the farm-gate price is only known in full after the fact.

## What moves the price of milk?

### Chinese import demand

China is the largest single buyer of internationally traded dairy, and its purchasing swings with domestic milk production, stock levels and infant formula demand. A year when China steps back from the Global Dairy Trade auction depresses world powder prices regardless of what happens in supplying countries.

### Feed costs

Housed systems buy corn, soymeal and forage, so their margins compress when grain prices rise. Because milk supply responds within months, through feeding rate and culling decisions rather than herd size, feed price spikes translate into milk supply changes faster than in beef.

### Weather in pasture systems

New Zealand and Irish output depends on grass growth, so a drought or a cold spring cuts production sharply and immediately. Because those countries supply so much of the traded market, their weather moves world powder prices in a way their share of world milk production would not suggest.

### European policy

The end of European milk quotas in 2015 released a wave of production that depressed world prices for years. Support measures, intervention buying and environmental regulation on nitrogen and methane continue to shape how much milk Europe produces.

### Fat versus protein demand

Butterfat and protein are priced separately and their relative value has swung dramatically as dietary advice changed. The rehabilitation of butter raised fat values relative to skim powder, changing what processors make from the same milk and therefore what reaches the export market.

### Environmental regulation

Nitrogen leaching limits in the Netherlands and New Zealand, methane pricing proposals and water quality rules now constrain herd size directly in several exporting countries. This is a supply constraint that does not respond to price at all.

### Herd cycles and culling

Milk supply adjusts through feeding intensity and culling rates rather than through herd building, which takes years. A price collapse leads to heavier culling, which briefly increases beef supply and then reduces milk output for several years afterwards.

## How is milk produced?

A dairy cow calves once a year and produces milk for around ten months of it, with output peaking a few weeks after calving and declining thereafter. That lactation curve is why seasonal pasture systems concentrate calving in spring and why their production collapses in winter. Cows are milked twice or, in some systems, three times daily.

Raw milk is cooled on farm immediately, collected by insulated tanker every day or two, and tested for fat, protein, somatic cells and antibiotic residues before it is accepted. At the processing plant it is separated into cream and skim by centrifuge, standardized to a target fat content, and pasteurized.

From there the routes diverge. Liquid milk is homogenised and bottled, or ultra-heat treated for ambient shelf life. Butter is made by churning cream until the fat globules coalesce, leaving buttermilk. Cheese is made by adding starter culture and rennet to coagulate the casein, cutting and heating the curd, draining the whey, salting, pressing and aging. Powder is made by evaporating milk under vacuum and then spray-drying it into a fine powder that keeps for a year or more without refrigeration.

Whey, once a disposal problem for cheesemakers, is now a valuable product in its own right, concentrated and dried into whey powder or ultrafiltered into whey protein concentrates and isolates for sports nutrition and infant formula. That shift transformed cheese plant economics.

The FAOSTAT figures on this page are raw milk at the farm. A tonne of milk makes roughly a tenth of a tonne of cheese or a twelfth of a tonne of milk powder, so production and trade figures are not directly comparable.

## What is milk used for?

Most milk is consumed close to where it is produced, as liquid milk, yoghurt and fresh dairy products. Those markets are local because the products are perishable, and they take the majority of world milk in volume terms.

Cheese is the largest processed use in Europe and North America and the fastest-growing dairy category in much of Asia, driven partly by pizza and food service. Butter and butterfat go into cooking, baking and food manufacture, and their value rose considerably as dietary advice on saturated fat softened.

Powders are the products that make dairy tradeable. Whole and skim milk powder reconstitute into liquid milk, are used in confectionery, bakery and beverages, and are the raw material for recombined dairy in countries without a domestic industry. Infant formula is the highest-value powder market by a wide margin and the reason dairy trade became strategically important to several countries.

Whey proteins serve sports nutrition, clinical nutrition and infant formula, and lactose is used in pharmaceuticals as a tablet excipient. Casein and caseinates go into processed foods and industrial applications. Almost nothing in a modern dairy plant is discarded, which is a considerable change from fifty years ago.

## Supply chain and chokepoints

The chain is defined by the cold chain and by the fact that a cow does not stop. Milk must be collected every day or two whether or not a plant can take it, so processing capacity has to match peak production, which in seasonal systems means plants that run flat out for a few months and idle for the rest of the year. Drying capacity in particular is expensive and seasonal, and a plant breakdown at peak means milk with nowhere to go.

Concentration in processing is high in the exporting countries. A small number of cooperatives and companies handle most of the milk in New Zealand, Ireland, the Netherlands and Denmark, and they own the drying and cheese capacity that connects farmers to world markets. That gives them scale but also means a single food safety incident can affect a country's entire export position, as has happened.

Internationally, powder and cheese move in ordinary containers and butter in refrigerated ones, so shipping is not a constraint. The constraints are regulatory: dairy is among the most tightly controlled foods in international trade, with plant-by-plant approvals, residue testing and certification requirements that differ by destination. Losing an export listing removes market access regardless of price.

The structural pressure is environmental. Nitrogen, phosphate and methane rules in the Netherlands, New Zealand, Ireland and Denmark now cap herd numbers in the countries that supply most of the traded market. Unlike price-driven constraints, these do not relax when milk becomes profitable, and they are the main reason the long-run growth in exportable surplus is expected to come from elsewhere.

## Key companies

- Fonterra: cooperative processor and exporter, New Zealand, listed (FCG)
- Lactalis: processor, France
- Nestlé: processor, Switzerland, listed (NESN)
- Dairy Farmers of America: cooperative processor, United States
- FrieslandCampina: cooperative processor, Netherlands
- Arla Foods: cooperative processor, Denmark

## Timeline

- 1864: Pasteurisation is developed. Heat treatment that killed pathogens without ruining flavour made milk safe to sell beyond the farm and created the urban dairy industry. (https://fil-idf.org)
- 1878: The continuous centrifugal separator is patented. Mechanical separation of cream from skim made butter and cheese production industrial and is still the first step in every dairy plant. (https://fil-idf.org)
- 1882-02: Refrigerated shipping opens the long-distance dairy trade. The same voyage that carried the first frozen meat from New Zealand also carried butter, beginning the export trade that made southern hemisphere dairying viable. (https://teara.govt.nz/en/sheep-farming/page-5)
- 1984-04: The European Community introduces milk quotas. Production limits imposed to control surpluses shaped European dairying for three decades and constrained the world's largest producing bloc. (https://agriculture.ec.europa.eu/farming/animal-products/milk-and-dairy-products_en)
- 2008-07: The Chinese melamine adulteration scandal. Contaminated infant formula killed several children and destroyed domestic consumer confidence, turning China into the world's dominant dairy importer almost overnight. (https://www.who.int/news-room/questions-and-answers/item/melamine)
- 2008-07: Global Dairy Trade auctions begin. A twice-monthly electronic auction gave the internationally traded dairy market its first transparent price discovery mechanism, now the reference for powder and butterfat worldwide. (https://fil-idf.org)
- 2015-04: European milk quotas end. Removing production limits released a wave of European milk that depressed world prices for several years and permanently raised the European share of the traded market. (https://agriculture.ec.europa.eu/farming/animal-products/milk-and-dairy-products_en)
- 2020-03: Food service closures disrupt dairy demand. The abrupt loss of restaurant, hotel and school demand left processors with milk configured for the wrong products, and some was discarded while retail shelves emptied. (https://www.fao.org/markets-and-trade/commodities-overview/en)
- 2022-06: Feed and energy costs squeeze margins worldwide. Grain, fertilizer and energy price increases raised the cost of housed milk production sharply, and herd contraction in several countries followed. (https://data.imf.org/en/datasets/IMF.RES:PCPS)
- 2023-11: Nitrogen rules begin capping herds in the Netherlands. Environmental limits on nitrogen deposition forced buyouts and herd reductions in one of the most productive dairy exporters, a supply constraint that does not respond to price. (https://www.fao.org/markets-and-trade/commodities-overview/en)

## Frequently asked questions

### which country produces the most milk

India produced 135 million tonnes of raw cow milk in 2024, 17% of the world's 788.6 million tonnes (FAOSTAT). United States was second with 13%. These figures cover cow milk only; buffalo milk, important in South Asia, is counted separately.

### why is milk barely traded internationally

Because it is roughly seven-eighths water, perishable within days and needs refrigeration. What travels instead is milk with the water removed and shelf life extended: milk powders, butter, cheese and whey proteins. Read the dairy trade table as a map of surplus regions, not of dairying.

### is the milk price on this page a world price

No. It is the United States Class III price, meaning milk used for hard cheese, calculated under federal marketing orders from wholesale cheese, whey and butterfat prices. The closest thing to a world reference is the Global Dairy Trade auction, which this site links to rather than republishing.

### what is a hundredweight of milk

One hundred pounds, an American convention, equal to about 45.4 kilograms or roughly 46.6 liters. United States milk prices are quoted per hundredweight, which is why the number looks unfamiliar next to per-tonne or per-liter prices used elsewhere.

### why does New Zealand dominate dairy exports

Because it produces a modest share of world milk but has a small population, so almost all of it is available for export. Its low-cost pasture system and concentration of processing capacity make it the largest supplier to the internationally traded powder and butterfat market.

### how much cheese does a tonne of milk make

Roughly a tenth of a tonne of cheese, or about a twelfth of a tonne of milk powder, depending on the composition of the milk and the product. That is why raw milk production figures and dairy trade figures are not directly comparable.

### what moves dairy prices

Chinese import demand above all, then feed costs in housed systems, weather in pasture systems, European policy, the relative value of fat versus protein, and environmental regulation limiting herd size in the main exporting countries.

## Sources

- FAOSTAT Crops and livestock products (QCL), 2024. License: CC BY 4.0 (FAO Statistical Database Terms of Use). https://www.fao.org/faostat/en/#data/QCL
- CEPII BACI international trade database (HS22, V202601), BACI HS22 V202601, fetched 6 September 2026. License: Etalab Open Licence 2.0. https://www.cepii.fr/CEPII/en/bdd_modele/bdd_modele_item.asp?id=37
- IMF Primary Commodity Price System (PCPS), 2026-08-06, fetched 6 September 2026. License: © International Monetary Fund. All rights reserved (IMF terms of use). https://data.imf.org/en/datasets/IMF.RES:PCPS

Text last reviewed 2026-09-05. Cite as: Commodity Origins, "Where does milk come from?", https://commodityorigins.com/commodities/milk/.