Global Dairy Markets Are Expected to Stabilise and Improve

Traders, processors and brokers at the StoneX dairy markets conference in Dublin expressed cautious optimism about market conditions. The outlook combines firm demand for dairy proteins with milk supply that remains higher than a year earlier.

Protein drinks, yoghurts and other enriched foods are increasingly available to consumers. Conference participants said the use of dairy proteins in everyday food and beverage products could continue to support demand over the longer term as interest in protein-rich diets persists.

Global milk output has stayed above 2025 levels despite difficult weather in July and August and elevated production costs. Larger cattle numbers have helped farmers meet demand, and no major signs of a pronounced reduction in supply were reported for the coming months.

Feed supplies could become more significant later in the year. Weak harvests in some areas may reduce winter-feed availability, with possible effects on milk production in the fourth quarter of 2026 and the first quarter of 2027. The scale and timing would depend on regional feed stocks, weather and costs at farm level.

European commodity prices have begun to level off after recent market movements. At the latest Global Dairy Trade auction, the overall index fell by 1.1%, its first decline in five auctions. Butter registered the largest fall among major products, down 5.7%, while cheddar rose by more than 16%.

Powder prices changed little: skimmed-milk powder increased by 0.1%, and whole-milk powder decreased by 0.8%. Market indicators point to broadly stable commodity prices in the short term, with some improvement possible over the following six months. Producers and processors are monitoring supply, feed, weather and input costs as potential winter shortages may affect production and prices towards the end of 2026 and into early 2027.