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As global milk output climbs across key producing regions, dairy commodity prices are coming under pressure. Based on data from Maxum Foods’ August 2025 Rising Milk Output Pressures Global Dairy Values report, the update outlines how rising milk production in key regions is influencing global dairy market dynamics, with shifting supply levels, evolving trade conditions and ongoing weather-related challenges.

In the EU, earlier constraints in milk and butterfat supplies are easing. However, a hot, dry summer on already parched soils is threatening feed availability later in the year and increasing the risk of disease. While cheese demand in the bloc remains stable, butterfat demand has weakened and exporters are losing market share.

Production conditions in New Zealand remain positive ahead of the new season, with milk output expected to edge above last year’s strong results. Weather patterns remain a key factor for short-term performance.

In the US, fundamentals continue to weaken. Strong milk and cheese production is coinciding with subdued domestic cheese demand, while export growth remains insufficient to significantly reduce inventories. Although recent trade deals appear less damaging than initially feared, uncertainty persists over the finer details and their potential impact on dairy trade.

Global trade volumes have continued to grow despite economic and geopolitical uncertainty, but signs of price resistance are emerging. New Zealand’s June export figures show some pushback against high pricing.

In Australia, rainfall prospects for August to October have improved in eastern regions, but parts of Victoria and Tasmania continue to face feed shortages. Hay prices have nearly doubled since May, although feed grain costs remain favourable. Culling activity in July reached its highest monthly level in more than three years, driven by higher cull cow prices.

Maxum Foods forecasts Australian milk solids production will fall by around 2% in the 2025/26 season, with a reduced spring peak expected due to lower cow numbers.