Milk deliveries in the EU increased by 5.5% in the fourth quarter of 2025 year-on-year.
This increased the production of dairy products, analysis from the Agriculture and Horticulture Development Board (AHDB) shows.
This, coupled with higher imports, added on to available supplies of butter and skim milk powder.
Stocks of whole milk powder were lower following lower production and imports, AHDB said.
Exports
AHDB said: “Total dairy exports from the continent increased by 9.9% in the fourth quarter year-on-year due to competitive prices.
“The increase in exports was mainly reported to MENA (Algeria, Egypt, Morocco, Oman, Saudi Arabia, United Arab Emirates) and Asia including Vietnam, South Korea, Malaysia, Japan, Philippines, Singapore, Indonesia, India and Pakistan.
“However, demand from China, one of the major importers of dairy remained on the lower side.”
Butter stocks
The increase in available butter supplies in Q4 was driven by higher production and imports, AHDB said.
“Incredible milk volumes in the second half of the year boosted production.
“Butter exports increased (8%) year-on-year due to being competitive in the global market.
“Overall, available supplies of butter increased 10.9% (48,000 tonnes) in the fourth quarter year-on-year.”
Cheese supplies
Cheese stocks stabilised in the fourth quarter year-on-year after increasing in the second and third quarter.
“Though production and imports increased during the period, robust exports limited the overall available supplies,” AHDB said.
“Export demand picked up from MENA countries, United Kingdom, Japan, South Korea and China.
“Available supplies of cheese increased marginally by 0.1% (1,000 tonnes) in the fourth quarter year-on-year.”
SMP stocks grew
Availability of skim milk powder supplies increased by 4.5% year-on-year in Q4 2025.
Production and imports increased by 21.7% and 8.8% respectively.
AHDB explained: “Higher milk production resulted in production of longer shelf-life products.
“Exports were significantly higher by 39.9% year-on-year.
“They increased mainly to MENA countries (Algeria, Egypt, Morocco, Saudi Arabia) and Asian countries including Indonesia, Malaysia, Vietnam and Singapore.”
Whole milk powder production declined marginally year-on-year with processors utilising more milk for butter and skim milk powder production.
“Exports increased during the period to MENA and Asian nations including Singapore, Bangladesh and Vietnam,” it said.
“Available supplies declined by 11.1% (8,800 tonnes) following slightly lower production and imports, with higher exports, which dragged down the overall supplies of milk powders.”
Farm margins
AHDB said that according to Rabobank, milk deliveries in the EU are expected to decline 0.9% in 2026, which is more likely to be visible later in the year.
“This contrasts with overall predicted 0.2% increase year-on-year in the big seven exporting nations during the period,” AHDB said.
“Farm margins are coming under pressure with higher milk volumes continuing to pressurise markets.”
Production of dairy products, butter and SMP in particular, are likely to be affected.
It continued: “Global geopolitical instability following war in Iran and Ukraine is disrupting trade flows thereby impacting availability.
“Animal diseases continue to remain a cause of concern for the sector along with economic and environmental factors in the domestic market.”