European Dairy Commodity Prices Expected to Stabilize in Early 2026

Ornua, a leading dairy co-operative, has released its latest Global Dairy Market Report, projecting that European dairy commodity prices are likely to stabilize in the first quarter of 2026. According to the report, while the market sentiment remains weak at present, price indices in Europe have stabilized and there has been an increase in the Global Dairy Trade (GDT).

The report highlights that despite the current geopolitical uncertainties which could impact demand, some buyers are beginning to re-engage due to perceived value at existing price levels. This re-engagement is supported by recent GDT outcomes and futures, which suggest a more stable market environment.

Ornua notes that the global milk supply grew by 2.5% in 2025, with the European Union supply increasing by over 1.5%. Looking ahead, global supply in 2026 is forecasted to grow by 1.0%, whereas the EU supply might see a decline of 1.0%, particularly in the latter half of the year.

The report also points out that buying activity tends to be subdued in January, and factors such as strong milk supply and geopolitical uncertainty could affect the market dynamics in the early months of 2026. However, assuming a decrease in supply and an improvement in demand, the report suggests that commodity prices could rise in the second half of the year, albeit modestly.

Additionally, the announcement of China's imposition of new provisional tariffs on certain EU dairy exports is noted as a potential factor that could impact the market.