Global Dairy Industry Trends in 2025

The global dairy industry is expected to show moderate growth in 2025. Rabobank forecasts milk production to increase by approximately 0.8% compared to the previous year.

Emerging markets remain the main drivers, with strong domestic demand and expanding export potential. However, global dynamics are uneven: the US and EU are recording growth, while countries in Oceania and South America face constraints related to water scarcity and climate change.

How is the industry changing?

In 2025, the global dairy industry will undergo a period of strategic transformation. While production volumes were previously considered the key performance indicator, today, the economics of ingredients is becoming more important. A fundamental shift is taking place: the value of milk is determined not by liters, but by its dry matter, protein, and fat content. For example, in the US, according to the Department of Agriculture, while overall milk production increased by only 0.5%, milk fat production increased by 3.4%.

This transition requires producers to rethink both their approaches to livestock production (breeding, feeding) and processing technologies. Investments in processing infrastructure are reaching record levels—in the US alone, over $8 billion is being invested in this sector.

Analysis of the Russian dairy industry

In the first half of 2025, the domestic industry demonstrated a 2.4% increase in production, although its structure is changing unevenly, according to the Russian Ministry of Agriculture. From January to July 2025, skim milk powder production increased by more than 15%, reaching almost 80,000 tons. Production of drinking milk and butter increased by approximately 1-3%, while the cheese segment declined by 1-2% depending on the category.

Dairy production in Russia continued to grow in the first half of 2025. According to the Ministry of Agriculture, production of drinking milk exceeded 3 million tons (up 2.4% year-on-year), yogurt reached 404,000 tons (up 1.8%), cottage cheese exceeded 246,000 tons (up 3.3%), and butter exceeded 174,000 tons (up 4.9%). Powdered milk and cream led the growth rate, reaching 111,000 tons, a 12.1% increase year-on-year. Experts note that this positive trend has affected all key industry segments.

This growth is driven not only by an expanded raw material base (raw milk production increased by 0.3%) but also by a significant increase in efficiency. Milk yield per cow in agricultural organizations increased by 4.5%, reaching 4,400 kilograms. This demonstrates the industry's vigorous development. Government support, including preferential lending and equipment leasing, remains an important factor in modernizing production.

Sustainable growth amid structural changes

The leaders in production volumes in the Russian Federation are agricultural regions with a high level of technological equipment:

// Novosibirsk region;
// Moscow region;
// Republic of Tatarstan.

Growth was fueled by government support measures, including subsidized loans for farmers at 8.3% per annum. However, the industry continues to face challenges, the main one being its dependence on imported technology and equipment, which reaches 70% for modern processing and cheesemaking solutions.

Consumer demand within the country is also changing. While traditional products (drinking milk, sour cream, and cottage cheese) maintain stable consumption, more modern categories are experiencing the greatest growth. For example, yogurt production increased by 10.1% in 2024, while cream production increased by 13.6%. This indicates that the Russian consumer is becoming more discerning and open to innovation.

Key global trends for 2025

// Component Revolution and Value-Based Manufacturing

As noted above, the "more milk at any cost" paradigm is finally giving way to the "more value per liter" model. Producers who have invested in genetics and feed technologies to increase fat and protein content are benefiting. In the US, average milk fat levels have reached 4.36% and protein levels 3.38%.

// Hyperspecialization and product functionality

Consumer demand is shifting from general-purpose products to specialized solutions. Three key trends are gaining momentum:

// Functional foods are drinks and yogurts fortified with probiotics, prebiotics, vitamins, and protein; products designed to support immunity, energy, and overall well-being.
// Organic production - Steady demand for organic milk is fueled by growing consumer awareness of the health benefits of such products and the ethics of production.
// Products for specific audiences – the baby food (cottage cheese, specialized milk) and lactose-free product segments are growing rapidly.

Technologists need to develop recipes that not only meet healthy lifestyle needs but also preserve traditional organoleptic qualities.

// Technological transformation of processing

Production lines are evolving toward greater flexibility and automation. Demand for equipment capable of processing 300 kg to 40,000 kg of milk per day points to a trend toward modular and scalable production. This technological advancement allows companies to quickly respond to changing market conditions and adapt their product range.

Adaptation of global trends in Russia

The Russian market doesn't simply follow global trends; it actively adapts them to the specific needs of local consumers and economic realities.

Functionality and healthy eating

Russian consumers have become more demanding of food ingredients. Health & Nutrition notes a growing demand for products with higher protein content. A prime example is cottage cheese: sales of crumbly and grained cottage cheese from one leading manufacturer increased by 58% and 32%, respectively, in the first half of 2025.

Organics as a premium value

A steady demand for organic products is emerging in Russia. According to EkoNiva Group, organic milk sales have been growing by tens of percent monthly. Producers are emphasizing natural ingredients and ethical production practices.

Expanding the product range through innovation

In response to growing demand, product lines are being actively expanded. Major players are introducing Greek yogurts, lactose-free lines, plant-based products, and new desserts. This demonstrates that the trend toward hyper-specialization and personalization is already being actively embraced by Russian companies.

Conclusion

The global dairy industry in 2025 will be driven by several drivers: sustainability, functionality, personalization, digitalization, and export expansion. For Russian processors, the key challenge is not only adapting to changing conditions but also proactively implementing practices that will shape the market's future. Those companies that combine innovation with efficiency and embrace sustainability will gain a competitive advantage and strengthen their position in both domestic and international markets.

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