# Milk & dairy: Extraction

From Kiwi pastures to Indian smallholders: how milk is made

Source page: https://www.materialinsights.org/commodities/dairy/extraction/

What this tab covers How it is mined, drilled or grown, and processed into a tradeable form: the main methods compared, their unit economics, by-products, and the companies that do this work globally and in India.

Milk comes from dairy herds milked at least twice a day, a routine Scheyder describes on a small Carolina farm (pdf p. 199). Systems range from grass-based herds in New Zealand to housed, feed-intensive herds in the US and Europe, and millions of smallholders in India. Raw milk is mostly water and spoils fast, so it is chilled and collected daily. Processors separate cream from skim, then make liquid milk, cheese, butter and powders. Whey, once a waste, now supplies protein and infant formula. Culled cows and calves feed the beef chain.

Milk comes from three main systems. Indian-style smallholder dairying keeps two or three cows or buffaloes per household, fed on crop residues and green fodder, with milk pooled by village co-operatives. Pasture-based systems in New Zealand and Ireland graze cows outdoors and produce seasonally at low cost. Confinement systems in the US, much of the EU and China keep large herds on mixed rations of silage, grain and protein meal, with very high yields per cow. Processing then decides value: liquid milk, cheese, butter, powders or fresh products. Only a small share of milk is traded, so most markets are local.

#### Methods compared

| Method | Share of supply | Typical scale | Recovery / efficiency | By-products | Unit cost |
|---|---|---|---|---|---|
| **Smallholder co-operative dairying (India)** | India 25.2% of world milk from all species in 2024 (247.8 of 984.8 Mt, FAOSTAT) | Amul: about 31 million litres a day from 3.6 million farmers, roughly 9 litres per farmer per day by calculation (FY2026) | yield 2,021 kg per cow and 2,123 kg per buffalo per year (FAOSTAT 2024) | dung for fuel and biogas, male calves | n/a |
| **Pasture-based seasonal dairying (New Zealand, Ireland)** | New Zealand produced 21.5 Mt of cow milk in 2024, 2.7% of world cow milk (FAOSTAT), but supplies 29.3% of world milk powder export value (UN Comtrade 2024) | Fonterra is the main processor; it was ranked tenth in the Rabobank Global Dairy Top 20 for 2025 | 4,682 kg per cow per year in New Zealand (FAOSTAT 2024) | beef from cull cows and calves | n/a |
| **Confinement total-mixed-ration dairying (US, EU, China)** | US 12.9% of world cow milk in 2024 (FAOSTAT); EU 154.2 Mt in 2026 (USDA PSD) | US milk output 231.7 bn lb in 2025 (WASDE) | 10,961 kg per cow per year in the US (FAOSTAT 2024) | beef from cull cows, manure for biogas | No cost series found; price reference only: US all-milk price $21.18/cwt in 2025 and $19.90/cwt forecast for 2026 (WASDE, Oct 2026) |
| **Processing into storable products** | all traded dairy | world 2026: cheese 23.5 Mt, butter 12.8 Mt, SMP 4.9 Mt, WMP 4.4 Mt (USDA PSD) | n/a | whey from cheese, buttermilk from butter | n/a |

#### How each method works
**Smallholder co-operative dairying (India)**

Farmers with a few animals sell milk twice daily to a village society, which pays on fat and solids content. District unions process it, and state federations such as GCMMF market it under brands like Amul. Buffalo milk is about 43% of India's output.

Low capital, wide income spread and a reliable outlet for farmers, but low yields and limited cold chain outside co-operative areas.
 FAOSTAT 2024; Free Press Journal and Dairy Business MEA, 2026 (GCMMF FY2026) **Pasture-based seasonal dairying (New Zealand, Ireland)**

Cows calve in spring and graze grass, so output peaks in a few months and is processed mainly into powders and butter for export. Feed costs are low but output depends on rainfall.

Lowest-cost exporter, but weather-exposed and dependent on demand from China and Southeast Asia.
 FAOSTAT 2024; UN Comtrade 2024; RaboResearch via Dairy Herd, Sep 2026 **Confinement total-mixed-ration dairying (US, EU, China)**

Large herds are housed and fed silage, grain and protein meal, often milked three times a day. US farms sell milk under federal orders priced by its use in cheese, butter, powder or fluid products.

Very high output per cow, but high feed, labour and environmental costs.
 FAOSTAT 2024; USDA WASDE, Oct 2026; USDA PSD **Processing into storable products**

Dairies separate cream, then make butter or ghee; curdle milk for cheese; or evaporate and spray-dry it into powder. Product mix follows relative prices of fat and protein.

Storage and trade become possible, but plants need steady milk supply to run economically.
 USDA PSD (Oct 2026) Unit economics are indicative ranges from the sources named; costs vary widely by deposit, region and year.

#### Who does it: global

| Company | Country | Activity | Volume | Year | Source |
|---|---|---|---|---|---|
| **Lactalis** | France | dairy processor (cheese, milk, yogurt) | 40.2 US$ billion dairy turnover (ranked first) | 2025 | [RaboResearch Global Dairy Top 20, via Dairy Herd, Sep 2026](https://www.dairyherd.com/news/global-dairy-giants-bet-267b-consolidation-and-specialization-industry-reshapes) |
| **Nestlé** | Switzerland | dairy and infant nutrition | 23.7 US$ billion dairy turnover | 2025 | [RaboResearch Global Dairy Top 20, via Dairy Herd, Sep 2026](https://www.dairyherd.com/news/global-dairy-giants-bet-267b-consolidation-and-specialization-industry-reshapes) |
| **Dairy Farmers of America** | US | farmer co-operative and processor | 23.1 US$ billion dairy turnover | 2025 | [RaboResearch Global Dairy Top 20, via Dairy Herd, Sep 2026](https://www.dairyherd.com/news/global-dairy-giants-bet-267b-consolidation-and-specialization-industry-reshapes) |
| **Arla Foods** | Denmark | farmer co-operative and processor (merging with DMK; combined milk pool 19.4 bn kg a year) | 23 US$ billion dairy turnover | 2025 | [RaboResearch Global Dairy Top 20, via Dairy Herd, Sep 2026](https://www.dairyherd.com/news/global-dairy-giants-bet-267b-consolidation-and-specialization-industry-reshapes) |
| **Danone** | France | fresh dairy and specialised nutrition | 21.6 US$ billion dairy turnover | 2025 | [RaboResearch Global Dairy Top 20, via Dairy Herd, Sep 2026](https://www.dairyherd.com/news/global-dairy-giants-bet-267b-consolidation-and-specialization-industry-reshapes) |
| **Yili** | China | dairy processor | 100 billion yuan sales (more than) | 2025 | [RaboResearch Global Dairy Top 20, via Dairy Herd, Sep 2026](https://www.dairyherd.com/news/global-dairy-giants-bet-267b-consolidation-and-specialization-industry-reshapes) |
| **Fonterra** ranked tenth after selling its Mainland consumer business; turnover not given in the summary | New Zealand | farmer co-operative and largest dairy exporter | not published | 2025 | [RaboResearch Global Dairy Top 20, via Dairy Herd, Sep 2026](https://www.dairyherd.com/news/global-dairy-giants-bet-267b-consolidation-and-specialization-industry-reshapes) |

#### Who does it: India

| Company | Country | Activity | Volume | Year | Source |
|---|---|---|---|---|---|
| **GCMMF (Amul)** | India | federation of Gujarat district milk unions; India's largest dairy | 73,450 Rs crore turnover (Amul brand over Rs 1 lakh crore); about 31 million litres of milk a day from 3.6 million farmers | FY2026 | [Free Press Journal, 2026; Dairy Business MEA, 2026](https://www.freepressjournal.in/amp/business/amul-crosses-1-lakh-crore-turnover-in-fy26-registers-11-growth-driven-by-strong-demand-wide-product-reach) |
| **Mother Dairy** volume not published in a source found | India | milk and dairy products, owned by the National Dairy Development Board | not published | n/a |  |
| **National Dairy Development Board (NDDB)** not a producer; no volume applies | India | statutory body that funds and supports dairy co-operatives | not published | n/a |  |

India is the world's largest milk producer, with 247.8 Mt from all species in 2024, 25.2% of world output, and buffalo milk is 43% of it (FAOSTAT). Co-operatives led by Amul anchor organised procurement. India trades very little dairy: butter exports were forecast at 45,000 t and fluid milk imports at 1,000 t in 2026 (USDA PSD).

## Other sections

- [Summary](https://www.materialinsights.org/commodities/dairy/index.md)
- [Overview](https://www.materialinsights.org/commodities/dairy/overview/index.md)
- [Correlation](https://www.materialinsights.org/commodities/dairy/correlation/index.md)
- [Production](https://www.materialinsights.org/commodities/dairy/production/index.md)
- [Stocks](https://www.materialinsights.org/commodities/dairy/stocks/index.md)
- [Cycles](https://www.materialinsights.org/commodities/dairy/cycles/index.md)
- [Trading](https://www.materialinsights.org/commodities/dairy/trading/index.md)
- [Movement](https://www.materialinsights.org/commodities/dairy/movement/index.md)
- [Criticality](https://www.materialinsights.org/commodities/dairy/criticality/index.md)
- [Characteristics](https://www.materialinsights.org/commodities/dairy/characteristics/index.md)
- [Emissions](https://www.materialinsights.org/commodities/dairy/emissions/index.md)
- [Relationships](https://www.materialinsights.org/commodities/dairy/links/index.md)