At the StoneX dairy markets conference in Dublin last week, the mood was relatively optimistic among traders, processors and brokers.

The long-term outlook for dairy markets remains strong, with demand for dairy proteins continuing to grow.

A protein boom is taking place globally, with dairy proteins appearing to be the preferred choice among consumers. Protein drinks, yoghurts and other protein-enriched foods are now commonplace on shop shelves and this growth looks set to continue.

In the shorter term, commodity prices are expected to remain relatively stable, with indications of small improvements over the next six months.

Milk supply

Despite challenging weather through July and August and high input costs, global milk production remains ahead of 2025 levels.

Cow numbers have grown to meet increasing demand, with no major slowdown in milk supply expected over the coming months.

Winter feed shortages following poor harvests are likely to pose the biggest threat to production, although the impact may not become apparent until the fourth quarter of 2026 and first quarter of 2027.

This week’s prices reflected the stabilising market, with European commodity prices starting to plateau and the Global Dairy Trade (GDT) index falling for the first time in five auctions.

Butter dropped back 5.7% at GDT, while cheddar jumped by over 16%. Powders were relatively steady, with skim milk powder up just 0.1% and whole milk powder down 0.8%. The overall index was back a 1.1.