Market report reveals a deepening oversupply of dairy

The Maxum Foods Global Dairy Commodity Update in November revealed that there is mounting pressure on global dairy markets as milk production continues to surge across major exporting regions. Oversupply, softening demand and shifting seasonal conditions are shaping the outlook for the months ahead, according to the report.

The assessment of global supply and demand by Maxum Foods suggests further price weakness is likely in coming months. Milk growth is robust across key exporting countries while demand in most markets is under pressure, the report said.

A summary of the key highlights from the update include:

• Milk production continues to rise across the EU, US and NZ, deepening global oversupply.
• EU butter output is outpacing demand, leading to rapid stock builds and falling product prices.
• US cheese and butterfat markets remain weak despite increased exports and volatile spot activity.
• NZ milk solids production hits record highs, though Chinese powder demand remains subdued.
• Australian conditions vary, with rainfall and hay price movements influencing local production.

NZ milk solids production reached all-time highs in Q3-25, yet mixed conditions affected peak volumes. With limited improvement in Chinese demand for NZ milk powders, post-peak product mix choices will be a key watch-out.

In Australia, the BOM outlook for November to January is for above-average rainfall for parts of the east and below average for parts of the north and west. Temperatures are likely to be above average for most of Australia except in parts of eastern NSW.

The surge in US milk output will continue into next year, according to the update, but the cheese spot market is likely to be volatile with growth in exports and production plant issues. US cheese and butterfat fundamentals remain weak, with uncertainty of SNAP benefits adding to demand concerns, while the EU is now far more competitive in export markets.

Image caption: iStock.com/ValentynVolkov