""Too much milk for the market, combined with strong milk solids growth, has contributed to a sharp decline in commodity prices," Rabobank senior agricultural analyst Emma Higgins said in a report Thursday, describing the output as "stunning." Global production has accelerated across major exporters. New Zealand farmers set new monthly milk solids records from May to September, with October marking the third-highest peak on record, according to the report. The EU, UK, US and South America have also delivered strong growth."
"That means supply is now outstripping demand, Fonterra Cooperative Group Chief Executive Officer Miles Hurrell said in a statement ahead of the cooperative's annual meeting on Thursday. Butter has fallen 9% since the start of October and sits 24% below its peak earlier this year, while whole milk powder and cheese are each down about 7% this quarter, Rabobank said in its Global Dairy Quarterly Report."
"Earlier in the year, Fonterra, the world's biggest dairy exporter, said payments to its farmer suppliers jumped 30% to NZ$16.2 billion ($9.4 billion) in the 12 months through July due to a record price of NZ$10.16 per kilogram of milk solids and a 57-cent dividend, which was also a record. Last week, Fonterra said its 2026 forecast for Farmgate Milk Price per kilogram of milk solids was NZ$9.00 to NZ$10.00."
Global milk production has accelerated across major exporting regions, producing supply that now outstrips demand. New Zealand set consecutive monthly milk solids records from May through September, with October at the third-highest peak on record. The EU, UK, US and South America also posted strong growth in output. Butter prices have fallen 9% since early October and sit 24% below this year’s peak; whole milk powder and cheese are down roughly 7% this quarter. Fonterra paid farmers NZ$16.2 billion in the 12 months through July and forecasts Farmgate milk prices of NZ$9.00 to NZ$10.00 for 2026.
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