Global Dairy Prices Decline Amid High Production and Soft Demand

In October 2025, global food prices experienced a continued decline, with the FAO Food Price Index slipping 1.6%, marking the lowest level in over two years. A significant factor in this trend was the 3.4% decrease in the FAO Dairy Price Index. This decline was primarily driven by robust milk production in regions such as Europe and New Zealand, which outpaced global demand.

The decreased interest fr om major Asian buyers and high inventories in importing regions added further pressure on dairy prices. Key dairy products like butter, cheese, and milk powder all registered price declines, indicating a cooling phase in the international dairy trade.

FAO analysts suggest that this moderation in prices reflects the market's adjustment after two years of significant volatility. Despite the decline in dairy prices, farmers and cooperatives face concerns about profit margins as production costs remain high.

Exporters and processors are encouraged to focus on innovation and efficiency to navigate this phase. Strategies include expanding into emerging markets and investing in value-added dairy products such as fortified milk powders and premium cheeses.

For dairy investors, the current trend points to a shift from inflation-driven price spikes to a more stable market environment, wh ere adaptability and sustainability are key to long-term competitiveness.