A global milk surplus is putting pressure on dairy commodity prices, prompting New Zealand dairy cooperative Fonterra to reduce its 2026/27 Farmgate Milk Price forecast. Since May 2026, Global Dairy Trade (GDT) prices for Fonterra’s reference products have fallen by 11%, leading the cooperative to lower its forecast by NZ$0.50 to NZ$9.25 per kgMS, with a revised forecast range of NZ$8.00–10.50 per kgMS.
Industry analysts attribute the decline to sustained high milk production across major exporting regions, with limited evidence of supply contraction despite weaker prices. ANZ agricultural economist Matt Dilly noted that abundant global milk supply has persisted since early 2025, although Europe has begun experiencing slower production due to lower milk prices and summer heat.
Fonterra CEO Richard Allen said the revision reflects softer-than-expected global demand amid strong supply, while highlighting that a potential El Niño weather pattern could influence milk production later in the season. The development underscores how global supply-demand dynamics continue to shape farmgate milk prices, reinforcing the importance of market diversification, production efficiency and value-added dairy products in maintaining farmer returns. (Rural News Group)
Source: Dairynews7x7 22 July, 2026 Read full story here
#GlobalDairy #Fonterra #MilkPrices #GlobalDairyTrade #DairyMarkets #FarmgateMilkPrice #DairyNews