December 6, 2019

India’s Rapidly Expanding Dairy Industry Faces Challenges

 |  By: Fran Howard

India, the world’s second most populous country, has been working strenuously for decades to increase the efficiency of its dairy industry. Already the world's second-largest producer of cow's milk in terms of total volume, behind only the United States, India continues to rapidly increase milk production despite ongoing weather challenges.

In the 2017-18 season, India produced 176.3 million metric tons of milk, accounting for about 20% of global milk production, up from just 5% of global output in 1970, according to data from India’s National Dairy Development Board. Niti Aayog, a government think tank in India, expects the country to produce more than 200 MMT of milk by 2022, with some of that growth coming from robust increases in milk output per cow.

According to the Indian government’s Integrated Sample Survey, India’s milk yields jumped 35% over the past decade. The gain occurred on top of a fairly low base, which leaves plenty of room for future growth, according to Sarina Sharp, analyst for the Daily Dairy Report.

“In the United States, milk yields climbed 13.5% over the same period, but cows in India remain much less productive than those in more developed nations, in part due to India’s tropical temperatures,” says Sharp. “The vast majority of India’s cows are on backyard farms, without access to the modern housing and balanced feed rations that allow for much higher milk yields. The average U.S. milk cow produces as much as eight of India’s cows.”

India has also been adding cows at a rapid rate, Sharp notes. In July, USDA’s Foreign Agricultural Service (FAS) estimated that India’s milk cow herd would average 60.6 million head this year, up 2.1 million head from last year. “Over the past decade, India has added 18 million milk cows—in absolute numbers, that is equivalent to adding nearly two U.S. dairy herds,” Sharp says. “However, due to much lower milk yields than in the United States, India has effectively stepped up milk production by only 25% of U.S. annual output.” 

While the U.S. dairy industry is expected to report nominal growth this year, India's cow milk production is expected to expand 5.3%, compounding gains of more than 5% in each of the past five years, notes Sharp.

However, climate will likely continue to present a challenge to Indian dairy farmers in coming years, according to a report by Niti Aayog that warned drought and floods could limit future availability of animal feed and water. This year, following an unusually wet summer in India, heavy rains in October and November delayed soybean harvest and could prevent some planting of winter crops. Moreover, the report notes that expanding cropland has replaced some pastures in India, which has limited grazing options. According to Niti Aayog, 500 million animals in India are feed insecure.