Dairy Australia - Dairy information for Australian Dairy Farmers and the industry

Primary content

Read our information on the production, sales, and trends for Australian manufactured milk powders.

Milk powder

Australian manufacturers produce a range of milk powders. The technology used in both the production and use of powders has seen the range of specifications available from Australian manufacturers expand in line with customer needs.

The most obvious trend in Australian milk powder production was previously the steady increase in the share of whole milk powder (WMP) output. Since 2001–02 this trend has reversed and skim milk powder (SMP) production has become the predominant milk powder. In 2018–19 SMP accounted for close to 80% of milk powders produced.

In recent years, dairy companies have had access to a smaller national milk pool and a wider variety of markets. As a result, companies have been more flexible with their product mixes to take advantage of relative movements in international commodity prices. Differing market access arrangements also impact on the competitiveness of product pricing. For example, local producers will be at a competitive disadvantage where Australia may not have negotiated a Free Trade Agreement, but a competitive supplier country has done so. This impacts local production mixes because the bulk of Australia’s milk powders (92%) is sold into export markets.

Australian production of milk powders (tonnes)


 2013/14
2014/15
2015/16 
 2016/17 2017/18  2018/19 
Skim milk powder  210,964 242,266
255,792
 222,109 190,926   176,573
Wholemilk powder*  126,322 96,840
66,125
 63,242  82,499 47,534 

*includes infant powder
Source: Dairy manufacturers

Only about 5%-10% of Australia’s powder production is sold domestically, with local usage mainly as an ingredient in food manufacturing. Infant formula is a high-value product that has shown considerable growth. Infant formula growth is generated through Australian supermarket sales (partly due to the demand from informal re-export trades), as well as through direct exports.

Australia also imported roughly 78 million tonnes of milk powders in 2018–19. Imports of milk powders have increased over the past few years, but, dropped almost 5% this year. Most of the imported milk powder is sourced from New Zealand.

Exported milk powder is often recombined into liquid milk products, particularly in tropical climates where fresh milk supplies are not readily available due to insufficient local production and/or limited development of cold chain distribution facilities. It is also used in bakery products (improving the volume and binding capacity of bread, and ensuring crisper pastry and biscuits), confectionery and milk chocolates, processed meats, ready-to-cook meals, baby foods, ice-cream, yoghurt, health foods and reduced-fat milks. Industrial grade powder is used for stockfeed.

The major export markets for Australian milk powders are concentrated in Asia, where 90% of SMP and WMP exports were destined in 2018–19.


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