Despite these emerging environmental challenges, Ornua notes that global milk collections remain fundamentally stable for the time being, showing no immediate signs of a sharp contraction. In May, global volumes expanded by approximately 2.5%, supported by strong output across most major dairy regions. This baseline supply resilience, coupled with the seasonal mid-summer slowdown in corporate procurement and holiday closures, creates a near-term risk of further price easing for major commodities through July and August. Consequently, significant market price growth remains strictly capped for the second half of the year.
The report highlights a recent easing in European spot values for cheese, butter, and skim milk powder (SMP) relative to the preceding month, reflecting the current volume buffer. Across the EU-27, April collections rose by 2.8%, with May volumes projected to post a further 2.7% gain, driven by aggressive production spikes in Germany (+6.3%), Poland (+3.8%), and the Netherlands (+2.6%). Conversely, Irish production diverged from the continental trend, retreating by 3.5% in April, with limited recovery anticipated due to a high historical baseline.
On the demand side of the ledger, international trade figures showed robust performance over the initial four months of the year, with global milk equivalent exports rising by 7% year-to-date. However, Ornua’s analytical team cautioned that these figures may reflect aggressive commercial “front-loading” by major buyers rather than sustained structural growth. This buying pattern, combined with acute cost-of-living pressures facing end consumers, has injected fresh buyer caution into the market, while European exporters continue to lose critical market share to competing US trade desks.