In 2018–19 Australia produced approximately 73,000 tonnes of butter and anhydrous milkfat (AMF) in commercial butter equivalent terms (CBE). AMF is butter with the water removed, like ghee. It is primarily produced for export and domestic food manufacturing applications, such as bakery and confectionery products. While these sectors also use butter, most domestic butter sales are through retail and food service outlets.

The manufacture of butter results in the creation of skim milk powder as a co-product, utilising the solids nonfat components of the milk such as lactose, casein, whey proteins and minerals.

Approximately 55% of the domestic sales of Australian dairy spreads were through supermarkets. In 2018–19, supermarket sales volumes decreased 2% to 48,000 tonnes, following a 20% increase in the average retail price.

Changing consumer attitudes towards butter and saturated fats have seen butter increase its share of the tablespreads market at the expense of margarine.

Butter and AMF production (tonnes)








 Butter/Butter blends (CBE)














Source: Dairy manufacturers

Butter imports to Australia accounted for more than a quarter of the butter market by volume in 2018–19. Approximately 90% of the 38,000 tonnes of butter and butter oil imported into Australia came from New Zealand. Most remaining butter was sourced from various European countries.

Australian exports of butter and AMF can vary significantly from year to year, depending on milk availability during the season and local dairy company responses to international prices for competing products.

Export volumes increased by about 30% in 2018–19, up to 20,000 tonnes, as some Australian processors prioritise butter production.

Australia’s most important overseas markets for butter and AMF are Thailand, Singapore, Malaysia and Greater China, out of nearly 40 countries.

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