IN Brief:
- Milk solids output in the EU, US, and New Zealand reached a record in 2025 and growth has continued into 2026.
- Commodity values are lifting from recent lows even though processors in key regions are still dealing with ample milk supply.
- The next test comes with the Northern Hemisphere spring flush, which could put renewed pressure on prices if demand eases.
Global dairy commodity prices are moving higher despite record milk output across the main export regions, according to Maxum Foods’ March 2026 market update. The report says milk solids production in the EU, US, and New Zealand reached an all-time high in 2025, adding almost as much supply as the previous four years combined, yet prices have started to recover from recent lows.
That makes the current market move unusual, because the rally is not being driven by tight raw milk availability. Instead, the report points to prompt demand, short-term buying activity, and wider market uncertainty as immediate supports. Supply remains substantial, and in parts of Europe that is still showing up in plant utilisation and product mix decisions.
Maxum says EU milk growth remains strong, with processors running full and prioritising skimmed milk powder and butter production while spot milk prices remain weak. In New Zealand, supply is declining seasonally but still outperforming expectations, supported by profitable milk prices, strong Global Dairy Trade results, and supplementary feed imports. Fonterra has also lifted its 2025-26 forecast farmgate milk price.
In the US, January milk output came in below expectations, but herd expansion continues. The report also notes softer pizza sales, set against some demand support from USDA Section 32 food purchases. Maxum adds that global dairy trade reached an all-time high in 2025, helped by a larger exportable surplus in the second half of the year and a weaker US dollar. The next test for the market will come as spring milk volumes build in the Northern Hemisphere, with higher prices likely to depend on demand holding up against another wave of supply.
