Ornua has said that European dairy commodity prices have “likely reached a floor” and are expected to stabilise in the first quarter (Q1) of 2026.
In its latest Global Dairy Market Report, Ornua said that demand and “prices should improve as the year progress”, but the extent of any price recovery will depend on how much supply eases.
The co-op said that although sentiment remains weak, European price indices have stabilised, and the Global Dairy Trade (GDT) has increased.
“It will take time for global milk supply to decrease, and heightened geopolitical uncertainty could dampen demand.
Furthermore, the announcement that China will impose new provisional tariffs on certain EU dairy exports could have repercussions,” Ornua said.
Ornua
The report states as commodity prices show signs of stability, some buyers are beginning to re-engage as they see value at current prices.
“There are also indications of improved retail and export demand, supported by recent GDT results and futures, which suggest a more stable market,” it said.
Ornua noted that buying activity tends to be quiet in January, and strong milk supply and geopolitical uncertainty could affect the market in Q1 2026.
“Assuming supply decreases and demand improves, commodity prices should rise in the second half of the year, although any increases are likely to be modest,” the report said.
Global milk supply is expected to have grown 2.5% in 2025, with growth in European Union supply likely to exceed 1.5%.
For 2026, Ornua said that global supply is forecast to grow by 1.0%.
However, EU supply could fall by -1.0%, with most of the decline occurring in the second half of the year.
