Global demand for dairy up, driven by lower prices

Global demand has been better than you would think given the collapse in prices that we saw during the second half of 2025. On a milk equivalent basis, global imports were estimated up 3.9% from the prior year from August to November, which is the most recent data as of writing. That comes after global imports were flat year-over-year for the first seven months of the year. However, the improved demand didn’t stop prices from falling. Actually, I would argue that the lower prices are helping to drive the imported import demand.

The import growth has been driven by medium and smaller importers. Chinese imports did stabilize in 2025 after three years of declines, but they will likely only be up about 3% for the year and the pace of imports looks like it dropped off toward the end of the year. Imports by the next two largest importers, Mexico and Indonesia, look like they will be down for 2025 with the pace of imports dropping toward the end of the year. China and Mexico have been dealing with increased domestic milk production and modest demand growth which has limited imports while Indonesia seems to have stockpiled in 2024 and have been working down those stocks in 2025.

Nate Donnay is the director of dairy market insight at StoneX Financial Inc. He has been applying his interest in large complicated systems and statistical analysis to the international and U.S. dairy markets since 2005.

When you get past the top five importers, the data starts to point toward better demand. Malaysia, roughly the fifth-largest importer was up 28% YoY in November and up 7.2% over the past twelve months. Vietnam was up 46% in November and up 17.2% over the prior 12 months. Algeria was weak in the first half of the year but they are also taking advantage of the lower prices to stock up and their imports for November were up 13% from the prior year. We’ve seen continued good demand from Algeria with new tenders for product in early January.

Demand has varied substantially by product. Total global imports of whole milk powder (WMP) will likely end 2025 down for the year. SMP imports were up 5% for the August-November timeframe and should end the year up as well. Cheese imports have been strong for most of 2025 and will likely end the year up about 6.5%.

But the standout has been butter. Global imports of butter will likely be up more than 10% for 2025. We’ve seen continued strong import demand for branded butter by China and the U.S. (the two largest butter importers in 2025) and we’re seeing other importers taking advantage of sharply lower prices (especially very cheap U.S. prices) to stock up. Saudi Arabia’s imports were up 240% YoY in November with the 12-month rolling total up 50%. South Korea’s imports in November were up 27% with the 12-month rolling total up 42%.

Falling dairy prices and improved availability helped to boost dairy demand from mid-sized and smaller importing countries in the second half of 2025. With U.S. cheese and butter prices well below the other major exporters and at multi-year lows in early 2026 we should expect to see good global import demand continue. However, with milk production growth strong in the U.S., and the other major exporting countries, the good demand won’t necessarily mean higher prices right away, but it is important to keep an eye on global demand.