Global Dairy Market: How Changes in Production and Prices Affect the Agricultural Sector

Global Trends in the Milk Market
Over the past year, the global milk market has undergone significant changes that have noticeably impacted the agricultural sector. Gregor Dietachmeier, a representative of a company specializing in forage harvesting equipment, shared his insights on the current situation.

This is reported by AgroReview

Factors Affecting Milk Price Dynamics

For the past six months, the milk market in Europe has shown a negative price trend. The main factor has been a substantial increase in milk production in the EU and North America. In Germany, for instance, the outbreak of foot-and-mouth disease shifted calving schedules, leading to increased production volumes during an atypical period. Sufficient rainfall last summer in Europe contributed to a high yield of feed, further boosting livestock productivity. Since August of last year, there has been a significant increase in milk supply in the market, while prices have dropped to their lowest levels in recent years.

At the same time, global events, including the war in the Gulf and the Middle East, have disrupted international logistics chains. Agricultural machinery manufacturers have felt the effects of a two-year stagnation, during which the market declined by 30%. However, after August 2025, signs of recovery emerged, and moderate growth in demand is anticipated, particularly for forage harvesting equipment.

Global Milk Production and Consumption

Global milk consumption remains stable; however, during certain periods, overproduction leads to price reductions. Surpluses of milk are directed towards processing into long-lasting products, such as cheeses—not only for direct consumption but also as ingredients for other dishes, such as pizza. The growing demand for processed dairy products is evident in India and Asian countries, as well as Russia. In 2025, butter prices in Europe fell, but increased consumption in America led to a rebound.

Europe produces more milk than it consumes, while countries like India, China, Asian regions, and Russia import a significant portion of dairy products due to their own deficits. Imbalances in milk production and consumption remain a relevant issue, and favorable weather conditions for pastures provide cheap raw materials for the dairy industry.

“Life goes on, and problems are increasing. As a manufacturer of forage harvesting equipment, you certainly keep an eye on the catastrophic phenomena in the dairy sector. We know that this is not just a Ukrainian problem, but a much larger one.”

This year, Ukraine is experiencing favorable conditions for crop production, ensuring a sufficient amount of green fodder for livestock. If a similar situation occurs in leading milk-producing countries—such as the Netherlands, Denmark, and Ireland—it will open new opportunities for Ukraine as a potential major player in the global milk market.

Regarding investments in equipment, the situation remains challenging: farmers are receiving low prices for wheat and corn (190 and 185 respectively), which does not encourage them to make new investments. Meanwhile, the meat livestock sector is showing record prices—700 euros for 100 kg of beef.

Gregor Dietachmeier notes that, overall, machines for the dairy sector are primarily supplied to regions where demand is growing. However, even in high-production countries like New Zealand, demand for equipment remains low due to intensive grazing. Meanwhile, the PÖttinger team continues to develop strategies for expansion into markets with a milk deficit to ensure effective satisfaction of demand for equipment.

Experts believe that the main factor for stabilizing the market remains the balance between supply and demand. Ukraine can significantly strengthen its position provided that favorable climatic conditions are maintained and production capacities are developed.