Global dairy prices rebound as supply growth slows and export demand strengthens

Prices recover, but remain below last year

Global dairy product prices have begun to recover after the steep declines recorded since the second half of 2025, according to farmer.pl, citing analysis by Credit Agricole. In the European Union, the recent improvement has been led by milk powder, butter and whey. Cheese markets remain less uniform, with price performance varying by product.

The rebound has not erased the previous decline. Butter is still about 38% cheaper than a year earlier, while whole milk powder is down about 10%. Cheese prices are 15–28% lower, depending on the variety. Protein-focused products are the exception: whey is about 52% more expensive year on year and skimmed milk powder is up 29%, indicating that milk protein continues to command a premium over milk fat.

Higher prices are also visible on the Global Dairy Trade platform. In Poland, however, the farmgate milk price has fallen more sharply than the EU average and now stands slightly below the bloc’s average. Credit Agricole argues that this strengthens the competitiveness of Polish dairy exports.

Supply growth expected to lose momentum

Milk deliveries in the five largest exporting regions increased by 3.7% year on year between January and June 2026. The EU made the largest contribution, with deliveries rising 4%, while US supply grew 2.7%. Production also performed strongly in New Zealand and Argentina.

Credit Agricole nevertheless sees mounting evidence that production growth is easing. EU output has been affected by hot weather, reduced feed availability and weaker farm profitability, particularly in Western Europe. US production continues to expand, but the bank sees limited room for further yield gains. A high comparison base from the second half of 2025 should also restrain growth in the coming months.

The bank therefore expects a significant slowdown in milk delivery growth among the leading dairy exporters during the second half of 2026. That change would reduce the pressure created by expanding supply, although the outlook remains sensitive to weather, feed availability and production economics.

Export demand provides support

Demand indicators have improved more clearly. Dairy exports from the leading suppliers, measured in milk equivalent, increased by 8% year on year in the first half of 2026. Relatively low product prices supported buying, with particularly strong sales growth to Indonesia, Mexico, Saudi Arabia and the Philippines. Demand from China, however, remained weak.

Credit Agricole said available data showed only a limited impact from the blockage of the Strait of Hormuz on global dairy trade. Energy prices remain a risk because they can affect processing, transport and farm input costs. The bank identifies agricultural weather, the speed of demand recovery—especially in Asia—and geopolitical developments affecting energy and feed prices as the main uncertainties.

The combination of slower supply growth and stronger export demand may indicate that the global dairy market is entering an upward phase of its cycle. In Poland, Credit Agricole forecasts a farmgate milk price of about PLN 205 per hectolitre at the end of 2026 and about PLN 230 per hectolitre at the end of 2027. Whether the recovery lasts will depend on supply actually slowing in the second half and overseas demand maintaining its momentum.