Global Dairy Market Sees Positive Trends Amid Price Stabilization

Ornua's recent report highlights a shift towards a more positive sentiment in the global dairy market. This change is attributed to strong results from the Global Dairy Trade (GDT) which have exceeded initial expectations. The report notes that typically, the first quarter experiences lower demand, but current pricing levels have prompted some buyers to replenish their inventories.

According to the report, commodity prices have likely reached their lowest point and are expected to stabilize during the first quarter. However, while there is an increase in buyer engagement, there is still caution as the global milk supply is not expected to decline rapidly. The report also suggests that European commodity prices have found a floor, though how much prices will rise remains uncertain.

The report forecasts a 1% growth in global milk supply for 2026, following a 2.5% increase in 2025. In the first half of 2026, a growth of approximately 3% is anticipated, but this is expected to decline in the latter half of the year.

In terms of regional data, global exporters saw a 4.7% increase in milk collections in December, with most regions experiencing growth. Specifically, the EU reported a 5.3% rise in collections in December, attributed to improvements in margin and cow yield. Although growth may have peaked, EU collections are projected to increase slightly in the first half of 2026 before tapering off, leading to an overall annual supply increase of 0.5%.

In Ireland, milk supply rose by 5% in 2025, returning to levels similar to those in 2022. The UK also reported robust flows, with a 5.2% increase in output in December.