Dairy Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, 2021-2031

The Global Dairy Market is projected to rise from USD 1.01 trillion in 2025 to USD 1.35 trillion by 2031, expanding at a CAGR of 4.82%. This industry involves the harvesting and processing of liquid milk from mammals such as cows, buffaloes, goats, and sheep into various consumable products including butter, cheese, yogurt, and milk powders. The sector's growth is primarily underpinned by sustained population increases and urbanization in developing regions, factors that boost disposable incomes and improve access to commercial food supply chains. Furthermore, the enduring demand for these staple goods is reinforced by growing consumer awareness of dairy as a vital source of dietary protein and essential nutrients, ensuring consumption remains stable rather than dependent on fleeting trends.

Despite economic fluctuations, market volume remains robust; the Food and Agriculture Organization forecast in 2024 that world milk production would increase by 1.5 percent to nearly 981 million tonnes. However, the industry faces significant hurdles that could impede future progress, most notably the volatility of operational input costs like animal feed and energy. These fluctuating expenses compress producer margins and introduce instability into the supply chain, serving as a substantial challenge to the market's continued expansion.

Market Drivers

A primary catalyst driving market expansion is the surging demand for value-added dairy products, as consumers increasingly favor processed items like cheese, yogurt, and functional proteins over liquid milk for their extended shelf life and nutritional benefits. This shift is prompting processors to diversify their product lines and enhance manufacturing capabilities to satisfy global needs. For instance, the U.S. Dairy Export Council reported in February 2025, within its '2024 U.S. Dairy Exports' data, that U.S. cheese export volume rose by 17 percent year-over-year to a record 508,808 metric tons. Consequently, the industry is strategically pivoting toward these high-margin, shelf-stable goods as the focal point of international trade.

Adding to this momentum is the rise in disposable income within emerging economies, which facilitates greater access to commercial food supply chains. As purchasing power grows in developing regions, households are moving from informal markets to packaged dairy goods, stimulating a recovery in regional production hubs. According to the United States Department of Agriculture's 'Dairy: World Markets and Trade' report from December 2025, milk production in Argentina was expected to rebound by 8.5 percent in 2025 due to improved sector conditions. This escalating demand supports overall trade value, with the International Dairy Foods Association noting in 2025 that U.S. dairy exports reached USD 8.2 billion for the preceding year, underscoring the sector's economic resilience.

Market Challenges

The unpredictability of operational input costs, specifically regarding animal feed and energy, creates a precarious financial landscape for dairy producers that directly restricts market potential. Since feed and energy account for a significant portion of total production costs, elevated or volatile prices severely squeeze farmer profit margins, reducing the capital available for herd expansion or necessary technological upgrades. This financial pressure often forces producers to make difficult operational choices, such as reducing herd sizes or compromising on the quality of nutritional rations, which inevitably leads to lower milk yields and constrains the raw material availability required by processors.

This pattern of cost-driven supply restriction limits the industry's capacity to meet rising demand. For example, Dairy Australia forecast in December 2024 that the national milk pool would contract to 8.3 billion liters for the 2024-2025 season, attributing the decline largely to the pressure of persistently high operating costs and tightening margins. Such contractions in the primary milk supply curtail the manufacturing volume of downstream products like cheese and milk powder, thereby stalling the volume expansion of the global dairy market and creating instability within the supply chain.

Market Trends

The adoption of precision dairy farming technologies is fundamentally transforming production dynamics as producers aim to optimize milk yields while addressing labor shortages. Farmers are increasingly utilizing automated milking systems, robotic feeding solutions, and sensor-based health monitoring tools to improve herd management efficiency. This technological shift enables real-time data analysis regarding animal health and milk quality, reducing reliance on manual labor and optimizing resource allocation. According to Lely's 'Annual Report 2023' published in March 2024, the company reported a total turnover of EUR 888 million, a 25 percent increase attributed primarily to the global adoption of robotics and data management applications, indicating that digitalization is becoming essential for operational viability.

Simultaneously, the industry is undergoing a rigorous transition toward sustainable and eco-friendly packaging solutions to address regulatory pressures and environmental concerns. Dairy processors are actively replacing conventional plastics with bio-based materials, fully recyclable cartons, and tethered cap mechanisms to reduce the carbon footprint associated with logistics and post-consumer waste. This movement serves as a core differentiator for brands seeking to retain environmentally conscious consumers. As noted by Elopak in their February 2024 'Fourth quarter and full year 2023 financial results' presentation, the company achieved a record full-year revenue of EUR 1.13 billion, driven significantly by increased sales of aseptic and sustainable packaging, signaling that packaging innovation has shifted from a peripheral cost to a central element of market strategy.

Key Players Profiled in the Dairy Market

• Dairy Farmers of America Inc.
• Lactalis Group
• Fonterra Cooperative Group Ltd.
• Danone S.A.
• Yili Group
• Unilever PLC
• FrieslandCampina N.V.
• Arla Foods amba
• Saputo Inc.
• Nestle S.A.

Report Scope

In this report, the Global Dairy Market has been segmented into the following categories:

Dairy Market, by Product Type:

• Drinking Milk
• Cheese
• Yogurt
• Butter & Others

Dairy Market, by Distribution Channel:

• Departmental Store
• Independent Stores
• Hypermarket/Supermarket & Online

Dairy Market, by Region:

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Dairy Market.

Available Customization

The analyst offers customization according to your specific needs. The following customization options are available for the report:

• Detailed analysis and profiling of additional market players (up to five).

This product will be delivered within 1-3 business days.