India’s milk output is forecast to rise to 105.4m tonnes in 2026
USDA projects higher Indian milk, butter and non-fat dry milk production in 2026, with most incremental supply expected to be absorbed by domestic demand rather than exports. Fluid milk consumption is forecast at 93 million tonnes.
What happened
India dairy market · USDA forecasts higher Indian milk, butter and non-fat dry milk output in 2026, largely absorbed by domestic demand. India remains the
Key facts
- Cow's milk production forecast at 105.4 million tonnes in 2026, up from 103.2 million tonnes in 2025
- Cows in milk forecast at 62.5 million head
- Domestic fluid milk consumption forecast at 93 million tonnes in 2026
- Butter production forecast at 7.44 million tonnes in 2026, up from 7.19 million tonnes
- Butter consumption forecast at 7.39 million tonnes
- Non-fat dry milk production forecast at 790,000 tonnes in 2026, up from 770,000 tonnes
- Non-fat dry milk consumption forecast at 779,000 tonnes
Why this matters
Strategic buyers should prioritize Indian dairy assets with collection networks, cold-chain reach and value-added processing, as expanding supply is expected to remain largely within the domestic market.
What to watch
- Monthly milk procurement volumes and farmgate milk prices in major producing states
- Retail price movements for butter, ghee, paneer, curd and skim/non-fat milk powder
- Summer heat, fodder costs and monsoon conditions affecting yield and feed economics
- Growth in urban fluid-milk consumption versus USDA's 93 million tonne forecast
- Government procurement, stocking, subsidy or export-policy announcements
- Export demand and global prices for butter and skim milk powder
- Retailers should lock in 2026 supply discussions for fluid milk, butter, curd, paneer and milk-powder-linked products before processors redirect surplus into promotions.
- Expand private-label butter, ghee, cheese and dairy-beverage ranges where lower input-cost risk can support margin or value-price positioning.
- Use targeted promotions rather than across-the-board milk discounting; fluid milk demand is likely to absorb supply better than storable dairy categories.
- Monitor regional procurement conditions to identify states where lower milk costs could improve fresh-dairy margins first.
- Prepare contingency plans for farmer-price and cooperative-policy actions that could reverse any near-term input-cost benefit.