EU dairy short-term outlook – Spring 2026

Overview

• EU raw milk prices have stabilised after declining since October 2025, but remain under pressure, due to strong milk volumes.
• Processing is favouring high-value products like cheese, whey, and yogurt, while lower-value products like whole milk powder and drinking milk are declining.
• The EU dairy herd is forecast to continue shrinking in 2026, but milk yields are forecast to continue increasing due to ongoing efficiencies.

Raw Milk

EU raw milk prices have been easing since October 2025, due to oversupply, but the recent stabilisation of dairy commodity prices points to a floor forming, with raw milk prices likely to follow with a lag. Production is forecast to rise a further 0.2% in 2026 on resilient EU demand, with a strong first quarter giving way to year-on-year declines in the second half.

The size of the EU dairy herd is forecast to drop 0.9% in 2026, reaching a low of 18.6 million heads. This follows on from its long-term reduction, as seen in Figure 1. However, EU milk yields continue its opposing, long-term growth, reaching 8,359 kg milk per dairy cow in 2026. A forecasted increase of 1.1%. This pushes total cow milk production up to 158.3 million tonnes.

The European Commission attribute this high yield rate to “favourable weather and grassland conditions, and exceptional quality and availability of feed, delayed culling and a rebound from delayed calving after animal disease outbreaks in some [major suppliers]”.

Figure 1: EU yearly dairy cow heads and milk yield

Source: European Commission

Figure 1 shows the EU yearly dairy cow heads and milk yield, with estimates for 2025 and forecasts for 2026.

Dairy products

Processing continues to tilt toward higher-value products. Cheese and whey output and exports are set to grow, supported by strong global demand. Butter and SMP production should hold near 2025's exceptional levels, with improved EU competitiveness keeping SMP exports broadly stable. Whole milk powder production and exports are expected to fall again in 2026, extending last year's drop on weak price competitiveness and softer demand in key markets. Drinking milk continues to decline, but yogurt and cream production should rise on robust consumer demand.

Figure 2: EU weekly dairy commodity prices

Source: European Commission

Figure 2 shows the EU weekly dairy commodity prices from the 6th of July 2025 to 3rd of May 2026.

Cheese remains the standout, with production forecast to rise to 11,460 thousand tonnes in 2026, an increase of 210 thousand tonnes on the 2025 estimate. SMP production is also expected to accelerate, climbing to 1,553.1 thousand tonnes, up 64.0 thousand tonnes year-on-year. Whey and butter production are forecast to be broadly stable, with whey edging up to 2,113.9 thousand tonnes and butter to 2,268.2 thousand tonnes. WMP continues its decline, falling to 466.4 thousand tonnes.

Cheese exports are forecast to total 1,423.7 thousand tonnes in 2026, up 23.8 thousand tonnes, year-on-year, supported by continued demand for premium cheeses, particularly from the UK, US and Switzerland. Whey exports are predicted to rise to 768.0 thousand tonnes. Butter exports are expected to recover to 268.1 thousand tonnes after their 2025 dip.

In contrast, powder exports face ongoing headwinds. SMP exports are forecast to recover significantly to 797.2 thousand tonnes, though this follows a sharp decline in 2025. WMP exports are expected to continue falling, dropping to 168.9 thousand tonnes amid decreased demand from China and increased price competitiveness from New Zealand.

Domestic consumption of total fresh dairy products is forecast to decline further to 35,352.8 thousand tonnes, down 224.7 thousand tonnes. Cheese consumption remains resilient, rising to 9,920.4 thousand tonnes, up 86.9 thousand tonnes.

Figure 3: annual year-on-year change of EU exports, production and consumption of dairy products – 2025e and 2026f

Source: European Commission

Figure 3 shows the European Commissions forecasted year-on-year changes in cheese, whole milk powder, skimmed milk powder, butter and whey powders through consumption, production and exports.

The outlook remains subject to several downside risks. War in the Middle-East, the EU-Mercosur agreement, the EU–China trade dispute, labour shortages, deforestation regulations, and broader global economic and geopolitical tensions as well as continued disease risks will all play a role.

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