India’s milk output is forecast to rise 2% to 105.4m tonnes in 2026
USDA forecasts higher Indian milk, butter and non-fat dry milk production in 2026, with domestic demand set to absorb most of the increase. The outlook reinforces India’s position as the world’s largest butter producer, while offering limited near-term export upside.
What happened
Amul · USDA forecasts higher Indian milk, butter and non-fat dry milk output in 2026, largely absorbed by domestic demand. India remains the largest global
Key facts
- India cow's milk production: 105.4 million tonnes in 2026 vs 103.2 million tonnes in 2025
- Cows in milk: 62.5 million head in 2026
- Domestic fluid milk consumption: 93 million tonnes in 2026
- Butter production: 7.44 million tonnes in 2026 vs 7.19 million tonnes in 2025
- Butter consumption: 7.39 million tonnes in 2026
- Non-fat dry milk production: 790,000 tonnes in 2026 vs 770,000 tonnes in 2025
- Non-fat dry milk consumption: 779,000 tonnes in 2026
Why this matters
The forecast favors investments in Indian milk collection, processing and domestic distribution partnerships over export-oriented dairy capacity.
What to watch
- Farmgate milk-price changes versus retail milk and ghee prices.
- Monsoon performance, fodder costs and heat-wave conditions affecting yield and procurement costs.
- Growth in butter, ghee and non-fat dry milk inventories at cooperatives and major processors.
- Government changes to dairy import, export or skim milk powder stock-management policy.
- Household consumption trends, especially rural income growth and foodservice demand.
- Increase shelf space and promotional planning for butter, ghee, yogurt, paneer and milk-powder-based products ahead of peak demand periods.
- Use improved supply availability to negotiate longer-term procurement contracts and strengthen private-label dairy margins.
- Prioritize value-added dairy launches rather than relying on fluid-milk price cuts, since domestic demand is expected to absorb most new output.
- Monitor regional supply conditions; surplus production may be uneven across states and not translate into nationwide lower prices.