Butter, dairy spreads and milk fats market in Australia, 2026

Earlier Report Observations

The market volume for butter and dairy fats in Australia declined from 225.9 thousand tons in 2018 to 188.4 thousand tons in 2019. This contraction was primarily driven by milk supply constraints that began in 2017-18, which severely impacted domestic butter production efficiency and availability. Climatic conditions continued to create volatility in milk supply through 2019, keeping production depressed. The formal introduction of the Dairy Code of Conduct on 1 January 2020 aimed to bring stability to milk supply agreements between farmers and processors, addressing one structural issue within the supply chain.

Market volume recovered to 195.2 thousand tons by 2021, following a shift in consumer behavior during the COVID-19 pandemic in 2020, which increased demand for staple dairy products like butter for household consumption. This trend was reinforced by growing consumer preference for natural, high-fat dairy products, which boosted demand across both retail and foodservice sectors. Product innovation, such as the launch of herb-infused and specialty butters, further catered to evolving culinary tastes and supported market growth during this period.

In the following years, the market volume showed signs of stabilization, edging down slightly to 186.8 thousand tons by 2023. Persistent milk supply constraints continued to challenge production volumes, limiting overall market growth. Throughout this phase, the regulatory framework, including the ongoing enforcement of the Dairy Code of Conduct and updates to the Australia New Zealand Food Standards Code, provided a structured environment for industry operations. Consumer interest in organic, natural, and flavored butter products remained strong, sustaining niche segments within the broader market.

Production butter, dairy spreads and milk fats in Australia

In kind, 2018-2021, K t

Globally, Australia ranked as the 21st largest producer of butter, dairy spreads, and milk fats from 2018 to 2021.

Top producers of butter, dairy spreads and milk fats, 2018-2021

World map of production of butter, dairy spreads and milk fats, 2018-2021

Following a two-year decline, Australia's production of butter, dairy spreads, and milk fats rebounded. In 2021, the country produced 184.3 thousand tonnes, marking a 10.5% increase from the previous year. Over the period from 2018 to 2021, overall production fell by 8.9%, which translates to an annualized decrease of 3.0%. The lowest output was recorded in 2020 at 166.8 thousand tonnes, with the sharpest drop occurring in 2019 at 17.4%.

Annual dynamics of production in Australia in kind, 2018-2021, K t

In value, 2018-2021, M $ US

After a two-year downturn, Australia's production value for butter, dairy spreads, and milk fats saw growth. In 2021, the output was valued at 990 million US dollars, rising by 31.2% compared to the year before. From 2018 to 2021, the production value declined by 11.9%, averaging an annualized reduction of 4.1%. The lowest value was observed in 2020 at 754 million US dollars, with the most significant decrease happening in 2019 at 27.8%.

Annual dynamics of production in Australia in value, 2018-2021, M $ US

Exports butter, dairy spreads and milk fats from Australia

Exports in kind, t

In 2021, Australia exported 24 596 tonnes of butter, dairy spreads, and milk fats, representing a substantial increase of 55.3% from 2020. Over the 2018-2021 period, exports grew by 50.9%, with a compound annual growth rate of 14.7%. The lowest export volume was recorded in 2020 at 15 840 tonnes, which also saw the largest decline of 8.9% that year.

Annual dynamics of product's exports from Australia in kind, 2018-2021, t

From 2018 to 2021, Australia's export destinations for butter, dairy spreads, and milk fats in volume terms were highly diversified. The top three markets—China (16.7% of exports), Thailand (14.9%), and Malaysia (9.8%)—collectively accounted for just 41.5% of total flows. The remaining 58.5% was distributed among a wide range of smaller markets.

Structure of product's exports in kind by countries, 2018-2021

World map of product's exports from Australia in kind, 2018-2021

Exports in value, M $ US

The market showed an unstable trend during this period. Exports in value terms peaked in 2021 and reached their lowest point in 2020, with a 1.8-fold difference between these years. In 2021, butter, dairy spreads, and milk fats exports from Australia totaled 132.1 million US dollars, surging by 84.4% compared to the previous year. The minimum value was recorded in 2020 at 71.7 million US dollars, which also experienced the largest decline of 15.1%.

Annual dynamics of product's exports from Australia in value, 2018-2021, M $ US

Throughout 2018-2021, Australia's exports of butter, dairy spreads, and milk fats in value terms were not heavily concentrated in a few key markets. The leading destinations—China (15.5% of exports), Thailand (12.4%), and Malaysia (11.5%)—together made up only 39.4% of total flows.

Structure of product's exports in value by countries, 2018-2021

World map of product's exports from Australia in value, 2018-2021

Imports butter, dairy spreads and milk fats to Australia

Imports in kind, t

In 2021, Australia imported 35 520 tonnes of butter, dairy spreads, and milk fats, down by 13.6% from the previous year. Between 2018 and 2021, imports decreased by 11%, equating to an annualized rate of 3.8%. The highest import volume was recorded in 2020 at 41 091 tonnes, which also saw the largest increase of 6.2% that year.

Annual dynamics of product's imports to Australia in kind, 2018-2021, t

From 2018 to 2021, the geographical pattern of Australia's imports in volume terms was dominated by New Zealand, which accounted for 85.6% of total flows. Other trading partners held relatively minor shares.

Structure of product's imports in kind by countries, 2018-2021

World map of product's imports to Australia in kind, 2018-2021

Imports in value, M $ US

In 2021, Australia's imports of butter, dairy spreads, and milk fats were valued at 177.7 million US dollars, declining by 8.8% compared to the previous year. Over the 2018-2021 period, imports fell by 20.4%, with a compound annual growth rate of -7.3%. The largest decrease occurred in 2019 at 14.4%, while the highest increase was recorded in 2020 at 2.0%.

Annual dynamics of product's imports to Australia in value, 2018-2021, M $ US

During 2018-2021, New Zealand dominated Australia's imports in value terms, capturing 83.7% of total flows. The remainder was spread across a fragmented array of other markets.

Structure of product's imports in value by countries, 2018-2021

World map of product's imports to Australia in value, 2018-2021