Ever.Ag’s latest Global Dairy Directions outlook is murky with plenty of milk expected, at least in the US. European milk output growth has slowed but remains ahead of expectations. Parts of the continent are growing at impressive rates, but the heat wave in June and July will likely affect supply ahead of the declines expected in Q4-26.

Meanwhile, the US dairy herd is at a multi-decade high, and more cows and healthy producer margins should support further gains. NZ supply growth will be challenged from here by strong comparables and higher input costs. The “super” El Niño comes with uncertainty regarding its peak intensity later in the year, around time of the Spring production peak.

Demand in mature markets is expected to remain soft, but the international market continues to look for more dairy product. The most recent add-up of trade shows April MSE trade rose by nearly 13% YOY, with growth apparent in most key global demand regions. This was led by China’s renewed appetite for WMP. Cheese has been the strongest growth engine, while butter and SMP trade has surprised to the upside.

Whether this trend continues into the second half of 2026 remains to be seen. Inflationary pressures may create some demand headwinds, while the exportable surplus will shrink due to slower projected global milk growth.