- Global milk production is rising, while China is limiting imports, increasing pressure on procurement prices in Europe and Poland
- Statistics Poland (GUS): the average milk procurement price in Poland in August 2026 was 22 percent lower than a year earlier, while dairy industry revenues fell by 10 percent year over year
- PKO BP forecasts that the declines will slow and prices may rise at the turn of 2026 and 2027, with a chance of positive growth in the first half of 2027.
According to the Agro Nawigator report by PKO BP bank, the global dairy market remains under pressure from high supply and relatively weak demand. Although signs of improvement are already visible in some market segments, the situation for milk producers remains difficult.
Milk production is growing in the EU and New Zealand
In the first seven months of 2026, milk deliveries in the European Union were more than 3 percent higher than in the corresponding period of the previous year. Solid growth was recorded, among others, in Germany. New Zealand saw an even stronger increase in production, with milk deliveries rising by more than 5 percent year on year.
The greater supply of raw milk led to an increase in dairy product production in the EU. According to European Commission data, butter production increased by nearly 9 percent year on year, skimmed milk powder production by 10 percent, and cheese production by 3,5 percent. Such high supply makes it difficult for prices to recover, particularly where demand is not keeping pace with production growth.
China buys fewer dairy products
An additional burden on the global market is weaker import demand in China, which is an important buyer of dairy products. According to CLAL data cited in the report, during January–August 2026, Chinese imports of dairy products, measured by product weight, decreased by about 5 percent year over year.
The largest declines were in skimmed milk powder, imports of which fell by 20 percent. Purchases of liquid milk (-10 percent) and whey powder (-9 percent) also decreased. Weaker demand from China limits exporters’ ability to absorb growing production and increases pressure on prices.
The farmgate milk price in Poland fell by 22 percent
Negative trends on the global market are also evident in Poland. According to Statistics Poland (GUS) data, the average farmgate milk price in August 2026 was 22 percent lower than in August 2025.
Declines in dairy product prices also affected the results of the processing industry. In the first half of 2026, revenues in the dairy industry decreased by 10 percent year over year. The sales profitability rate remained at 2,7 percent, falling by only 0,04 percentage points.
For milk producers, this means having to operate in conditions of lower farmgate prices, which may make it difficult to cover the costs of feed, energy, labor, and herd maintenance.
Not all dairy products are getting cheaper
As PKO BP analysts note, the milk market is no longer uniformly weak. There are signs of a recovery in demand for products with a high milk protein content. According to European Commission data, at the end of September 2026, the average price of skimmed milk powder in the EU was 38% higher than a year earlier. The price of whey powder, meanwhile, rose by as much as 58% year on year.
The situation remained considerably more difficult in the milk fat segment, where production growth outpaced the pace of demand recovery. However, signs of improvement also appeared in this market towards the end of the third quarter. According to data from MRiRW, butter prices reached their highest level since November 2025 in the third week of September.
A recovery in selected segments may support the milk market, although it does not yet mean a rapid improvement in the situation of all producers and processors.
When might milk prices start to rise?
The outlook for the final quarter of 2026 remains cautious, but there are indications that could support market stabilisation. According to PKO BP analysts, milk production by leading global producers can be expected to slow over the next six months. The reasons are expected to include lower production profitability and unfavourable weather conditions.
If these forecasts come true, supply pressure may ease and price declines may slow. At the turn of 2026 and 2027, prices could then rise year on year. PKO BP forecasts that in the fourth quarter of 2026, the average milk purchase price in Poland will be 10–15 percent lower than in the corresponding period of 2025. In the first half of 2027, however, it may already be a few percent higher than in the first half of 2026.
Milk producers still need to exercise caution
The forecast price rebound offers hope of an improved situation for dairy farms, but much will depend on the actual pace of production cuts, the recovery in demand, and conditions in the most important export markets.
For now, the market remains under pressure from high supply, and conditions vary across the different dairy product segments. In the coming months, farmers may therefore still need to monitor costs carefully and plan investments cautiously.
The most important signal from the Agro Nawigator report, however, is that after a period of steep declines, the market may gradually be approaching a turning point. A more pronounced improvement in milk purchase prices in Poland remains a forecast, however, and will be tested in the months ahead.