Update
Global Dairy Quarterly Q3 2026 | A market in transition
Slowing milk growth, tighter producer margins and weather risks are creating a more constructive outlook for milk powders and dairy proteins into 2027.
Summary:
Global dairy markets are moving from a period of abundant milk growth toward greater supply uncertainty. Big 7 production growth is forecast to slow through H2 2026, with output contracting in Q4 and remaining broadly flat through H1 2027. Growth in the US and Australia should continue at a more measured pace, while El Niño poses a downside risk to New Zealand production, and South American momentum continues to weaken.
Milk powders and dairy proteins remain the strongest parts of the commodity complex, supported by trending GLP-1 drugs, resilient Asian demand, and signs of stabilization in China. Butterfat markets remain well supplied, while expanding production continues to weigh on cheese fundamentals.
The outlook is becoming more constructive for powders and proteins, but risks remain elevated. Producer margins are tightening as feed, energy, fertilizer and freight costs rise, while Europe faces structural limits on milk expansion. Southern Hemisphere weather, geopolitical disruption, and consumers’ ability to absorb higher prices will be the key market drivers into 2027.
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