As I write this message, the global dairy fraternity is gathered in Santiago de Chile for the IDF World Dairy Summit 2025, being held from 20-23 October under the theme "Nourishing a Sustainable World." This marks the first time the Summit is hosted in South America, bringing together experts, policymakers, scientists, and industry leaders from over 40 countries to deliberate on the future of dairy. I am pleased to share that the Indian delegation — representing by National Dairy Development Board (NDDB), Amul, Indian Dairy Association (IDA), and many other Indian organizations — is actively participating in this prestigious event. Their participation underscores India's growing leadership role in shaping the global dairy agenda, particularly in areas of sustainability, nutrition, and smallholder-inclusive growth.

The timing of this global dialogue is particularly relevant, as the dairy sector-both globally and domestically-is navigating a period of transformation. In India, milk production is projected to increase by 4-6 % in 2025, up from approximately 239.3 million tonnes in 2024, reaffirming our position as the world's largest milk producer. This steady rise reflects ongoing improvements in genetics, feeding practices, and cooperative infrastructure. The dairy sector continues to contribute nearly 5% to India's GDP and supports the livelihoods of more than eight crore people, making it one of the most important engines of rural economic growth.

The dairy sector today sits at an important inflection point - shaped by resilient domestic demand, evolving procurement economics at procurement level, and heightened sensitivity to global ingredient prices and trade flows. It is important we read these signals clearly so our policy priorities, procurement practices and market strategies protect farmer incomes while enabling processors and traders to remain competitive.

India's milk production and processed milk consumption continue to grow. Official trade and market analyses indicate production is expected to rise modestly in the near term while factory-use (processed) consumption is projected to increase as retail and organised dairy channels expand. This structural domestic demand underpins procurement price resilience even when global commodity indices move sideways.

Across the country we are seeing cooperative unions and private processors periodically raise procurement prices — a necessary response to rising input costs (feed, labour and logistics) and to ensure farmer participation in collection networks. Leading cooperatives have recently announced incremental procurement hikes and targeted farmer support (for example, feed price adjustments and commission changes at society level) to balance margins across the value chain. While helpful for farmers, these changes can compress processor margins and create short-term retail price volatility unless managed with demand-led planning and efficiency measures.

Global ingredient markets, as tracked by the Global Dairy Trade (GDT) platform and international commodity monitors, have shown softening in recent auction rounds — driven by seasonal production peaks in exporting countries, lower Chinese import volumes and precautionary buyer behaviour. Even small movements in whole milk powder (WMP) and skim milk powder (SMP) prices cascade into domestic markets for infant formula, SMP-based blends and cheese inputs, affecting export competitiveness and processors' rawmaterial sourcing choices.

Multi-lateral projections (OECD-FAO) and market reviews suggest that global dairy consumption will continue to expand in emerging markets while supply will adjust to price signals — a dynamic that should support stable to moderate price recovery over the medium term. However, risks remain: feed and energy prices, exchange-rate swings, geopolitical disruptions, and variable global demand (notably from large importers) can quickly change the outlook. These global risks reinforce the need for India to prioritise supply chain resilience, value-added product diversification, and export readiness in selected categories.

The recent resurgence of the dairy sector in traditionally surplus countries like the United States, where dairy growth has rebounded to nearly 5%, surpassing India's growth rate, is both an eye-opener and a wake-up call for the Indian dairy industry. This development underlines the importance of revisiting and reinforcing the very foundation of our dairy success — an efficient, farmercentric supply chain. India's cooperative and organized dairy systems have historically ensured that 70-80% of the consumer's rupee reached the milk producer, creating a strong incentive for productivity, quality, and sustainability. However, in recent years, this crucial strength has been gradually diluted due to inefficiencies, fragmented procurement structures, and uneven value distribution across the chain.

To sustain our leadership as the world's largest milk producer and to secure the livelihood of millions of dairy farmers, it is imperative that we re-establish this efficiency and fairness in our value system. The U.S. experience demonstrates that with innovation, farmer focus, and value-added growth, even mature dairy economies can achieve renewed momentum. India must therefore not only protect but also modernize its cooperative model, invest in productivity enhancement, and ensure that the dairy farmer remains at the heart of every policy, enterprise, and initiative. The time has come for the Indian dairy industry to strengthen its core — efficient value chains, equitable farmer returns, and robust domestic and export growth — to maintain its global leadership and sustainability.

Need to Focus on Policy & Practice
Farmer income security: Encourage cooperatives and processors to adopt transparent, timely pricing formulas (fat and SNF linked), and scale targeted input subsidies or bulk-feed programs where feasible to reduce cost burdens.

Procurement efficiency: Promote investment in chilling, digital milk procurement records, society-level capacity building and pooled feed procurement to reduce collection costs and wastage.

Value-addition & exports: Support processors to move up the value chain (cheese, infant nutrition ingredients, WMP value-packs) and meet export quality standards so India can capture higher-value trade opportunities when global windows open.

Market intelligence & risk management: Strengthen realtime market intelligence (domestic procurement trends, GDT outcomes, feed price indices) and provide guidance on hedging and contract strategies for larger processors.

Sustainability & productivity: Parallel investments in genetics, feed conversion efficiency, methane reduction practices and women-led producer groups will reduce unit costs and improve farm incomes over time.

The resilience of India's dairy sector stems from the everyday decisions of millions of smallholders. As global headwinds cause periodic volatility, our collective response must be to stabilise farmer returns, modernise procurement system, and strengthen value chains so that Indian dairying can translate its vast domestic scale into sustained, higher-value growth. The IDA will continue to work closely with governments, cooperatives and industry partners to translate these priorities into practical actions that protect livelihoods and build long-term competitiveness.