GLOBAL DAIRY MARKETS IN 2026: SUPPLY EXPANSION, PROTEIN DEMAND, AND FUNCTIONAL DAIRY GROWTH
SUPPLY
Strong rebound in global milk production
DEMAND
Structural rise in protein demand
Global dairy markets in 2026 are being shaped by three key forces spanning across supply, demand, and consumer behaviour:
a.) strong rebound in global milk production,
b.) a structural rise in protein demand, and
c.) a shift toward functional and nutrient dense dairy formats such as kefir.
These trends interplay in ways that matter for producers, processors, physical traders and even derivatives risk managers who must navigate both abundant supply and increasingly segmented demand.
MARKETS 2026
RISING MILK PRODUCTION AND RENEWED SUPPLY PRESSURE Milk output across major exporting regions is expanding again after two years of weather driven volatility and contraction from higher costs/lower margins. The US is adding volume as feed markets stabilise, Europe has regained production momentum after regulatory and environmental constraints slowed growth, and New Zealand’s pasture conditions have improved from the lows of the previous season. The result is a coordinated supply upswing at a time when inventories in powders and fats are already (gradually) rebuilding.
This matters because dairy markets are highly sensitive to marginal changes in exportable surplus. Whole milk powder (WMP) and skim milk powder (SMP) prices tend to respond quickly when production rises faster than demand,
GLOBAL DAIRY
CONSUMER
BEHAVIOUR Shift toward functional and nutrient dense dairy formats
and forward curves in several markets are already reflecting expectations of more comfortable supply. However, the secondary risk beyond simply lower prices is the re emergence of regional imbalances. The U.S. and EU may expand more quickly than Oceania, creating spreads that traders can exploit but simultaneously complicating hedging strategies for processors and buyers exposed to multiple origins.
Producers face a familiar challenge: farmgate prices often soften before input costs fall, squeezing margins even as volumes rise. Processors, by contrast, may benefit from cheaper milkfat and protein inputs, provided demand remains resilient. The broader question for the industry is whether the supply recovery will be met by sufficient demand growth to prevent a return to the oversupply cycles seen earlier in the decade.
14 | ADMISI - The Ghost In The Machine | Q1 Edition 2026
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40
