Milk production is growing faster than global demand, leading to a sharp fall in international dairy prices. The Global Dairy Trade (GDT) index has now dropped for the sixth time in a row, signaling serious market weakness.
According to Susie Stannard, lead dairy analyst at the Agricultural and Horticultural Development Board (AHDB), milk supplies are “running too far ahead” of demand. This has caused large stockpiles of dairy products worldwide, which could keep prices low until 2026. Even if production slows, it will take time to clear existing inventories.
In recent GDT data: Sumul Dairy Reaffirms Commitment to Goa’s Dairy Growth
- Cheddar cheese prices fell 6.6% to €3,864/ton
- Butter prices dropped 4.3% to €5,533/ton
The European Union, responsible for nearly half of global milk exports, is at the center of this supply surge. While some countries like France, Germany, and The Netherlands saw declines (partly due to the bluetongue virus), others such as Ireland and Poland increased production sharply. As a result, EU milk output in September was 6% higher than last year.
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Falling prices are putting margin pressure on dairy farmers and processors. However, there may be a small positive side: cheaper prices could boost consumer demand, especially for butter, as buyers who had switched to vegetable oils may return.
In summary, the global dairy market faces oversupply, price volatility, and weak margins through 2026. Recovery will depend on controlling milk output and reducing the large inventories already in storage.
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Disclaimer
I do my best to share reliable and well-researched market insights but but occasional errors or omissions may slip through. Please view all content as informational, not financial advice.
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