Dairy prices have been climbing sharply across major exporting countries since the beginning of 2025 – a surprising trend considering the current global economic uncertainties. But signs are emerging that this momentum may soon slow down.
According to recent insights from a leading agricultural research group, global milk production only grew by 0.5% in the first quarter. This limited supply has helped support the current price strength. However, production is expected to pick up pace in the coming months, with growth forecasts of 1.1% in Q2 and 1.4% in Q3 – the strongest increase since early 2021. Most of this rise is likely to come from the US, the EU, and parts of South America.
🧭 On the demand side, things look less optimistic.
Consumer confidence in the US is near historic lows. China is facing economic slowdowns, and foodservice sales – as well as packaged consumer goods – are declining across several regions. Add to that the ongoing trade tensions, with sudden tariff changes disrupting global dairy flows.
In countries like Australia, the situation is mixed. Farmgate milk prices are hitting record highs, which is great news for producers. But challenges remain: dry conditions have impacted production volumes, feed prices are soaring, and domestic demand remains fragile.
🎯 So, what’s the takeaway?
While current market conditions may look strong, the second half of 2025 could bring a shift. Analysts expect a soft correction – not a crash, but a natural adjustment – as global supply rises and economic uncertainty continues to weigh on demand.
📌 Stay tuned – I’ll be keeping an eye on this market and sharing more insights soon!
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