Global dairy markets may be moving into a period where supply constraints provide stronger support for commodity prices, according to Rabobank’s latest Global Dairy Quarterly analysis. The bank expects slowing milk-production growth across major exporting regions to become an increasingly important market factor.
Global Milk Supply Growth Expected to Slow
Milk production across the major exporting regions continued to grow during Q3 2026, but growth slowed to an estimated 1.4% year-on-year, the weakest quarterly growth since early 2025.Rabobank expects production across the Big 7 dairy-exporting regions—the US, Argentina, Brazil, Uruguay, the EU, New Zealand and Australia—to grow by only 0.5% year-on-year in H2 2026. It forecasts a 0.2% contraction in Q4, followed by broadly flat production through the first half of 2027.
Demand Remains Resilient
Despite abundant milk supplies and continued economic uncertainty, global dairy demand has remained stronger than expected. Asian import demand continues to support international markets, with China showing signs of stabilisation and Southeast Asian demand remaining robust.Rabobank also points to growing demand for protein-rich dairy products, driven by consumer interest in health and nutrition as well as emerging GLP-1-related dietary trends. Milk powders, protein ingredients and cheese are therefore playing an increasingly important role in global dairy trade.
Milk Powder Markets Strengthen
Milk powder markets were among the strongest performers during Q3. At the latest two Global Dairy Trade auctions, skim milk powder prices increased by more than 10%, while whole milk powder prices rose by nearly 3%, despite large volumes being offered.Strong demand from Indonesia, Malaysia, the Philippines and Thailand has also supported New Zealand dairy exports during 2026.
New Zealand Farmgate Price Outlook
Rabobank has identified upside potential for New Zealand’s 2026/27 farmgate milk price. After Fonterra reduced its opening midpoint forecast from NZ$9.75/kgMS to NZ$9.25/kgMS in July, Rabobank says the final price could potentially move closer to NZ$10.00/kgMS, provided production economics remain manageable.New Zealand’s 2025/26 season ended with record production of 2.027 billion kgMS, while June and July 2026 each established new monthly production records for their respective months.
For the global dairy industry, the latest outlook points to a market increasingly shaped by supply uncertainty, resilient Asian demand and stronger demand for value-added protein ingredients. The balance between slowing milk production and continued demand growth will remain a key factor for dairy commodity prices through 2027.
Source: Dairynews7x7 15 Sep, 2026 Read full story here
#GlobalDairy #DairyCommodityPrices #Rabobank #DairyIndustry #MilkProduction #DairyMarket #MilkPowder
