Global Dairy Market: Milk Surpluses Put Pressure on Prices

Nearly all dairy regions experienced an atypical increase in milk yields, which led to a rise in global milk production volumes. According to calculations by Daily Dairy Report analyst Betty Berning, this year, the global market saw an estimated 1.68 million tonnes of surplus raw milk, which is enough to produce an extra 168 thousand tonnes of cheese or 68–91 thousand tonnes of butter. Despite increased demand for dairy products in developing countries, this year's milk yield volumes in key dairy regions exceed the export markets' capacity to absorb them. Surplus milk and commodity stocks are putting pressure on procurement prices. Raw milk production growth is expected to continue until the end of 2025, pending measures to correct the situation in producing countries.

Global Dairy Market: Cow Diseases and Weather Impact Milk Supply

From January to July, the EU's raw milk production decreased due to cow diseases and unfavorable weather. Drought has also led to lower yields in Australia. Conversely, the US and New Zealand increased their raw milk production, which has contributed to some softening in butter prices.

The Global Dairy Market: Unstable Milk Yields and Economic Conditions

According to Teagasc data, in 2025, milk production volumes are showing mixed dynamics in the main dairy product exporting regions. As reported by Agriland, demand for dairy products in the first half of 2025 was positive, driven by increased shipments to the Middle East and Southeast Asia, despite a decrease in import volumes from China.

Global Dairy Market Seeks Balance

Global economic challenges, trade disputes, and production hurdles may compel dairy market operators to gradually re-evaluate their activities in the second half of 2025. Dairy fat prices have hit record highs since last autumn, but Rabobank warns that growing dairy product supply and unstable demand could destabilize the market.

Global Dairy Market: Milk Production Declining

In April, milk production volumes decreased in the EU, the USA, and Oceania. The decline in milk yield was influenced by a reduction in cow herds due to diseases and the negative impact of drought on cow health, pastures, harvests, and water supply. According to FAO, in 2024, global milk production reached 982 million tonnes, an increase of 1.4% compared to 2023. This growth was ensured by a significant increase in production volumes in most regions of the world, which offset the decline in milk yield in Africa and North America.

The Global Dairy Market Has Entered a Period of Calm

According to Rabobank, in the second half of 2024, the supply of raw milk improved in regions exporting dairy products amid declining demand from dairy processing enterprises during the traditional slowdown in purchasing activity on the global dairy market during the New Year holidays.

Between proficit and deficit: an overview of the global dairy market

Despite the decrease in prices for milk raw materials in Europe, too much export supply for dairy products and weak demand on foreign markets, attractive niches for producers and exporters still remain in some countries.

Milk market overview in Ukraine and the world

The World Milk Crisis 2020 - what are the scenarios for future events?