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Rising output from the EU, US and New Zealand are putting downward pressure on commodity prices and creating market uncertainty, according to an August 2025 report.

Global dairy commodity prices are under increasing pressure as milk output rises across key producing regions, according to an August 2025 report by Maxum Foods. This dynamic is weakening market fundamentals and product values, creating a challenging environment for producers and processors. While the dairy agribusiness sector saw some price strength earlier in the year, the current trend indicates a shift toward a more bearish market sentiment driven by expanding supply.

The report highlights specific regional trends contributing to the global surplus. In the European Union, earlier supply constraints are now easing, even as a hot, dry summer threatens future feed availability. Meanwhile, the United States is seeing strong milk and cheese production that is outpacing weak domestic demand and an inadequate export growth rate. This combination is leading to a buildup of inventories and eroding values.

New Zealand, a pivotal player in the international dairy trade, is also experiencing favorable production conditions ahead of its new season. Its milk output is projected to grow slightly above last year’s already strong results. This increased supply, alongside the output from the EU and the US, is a primary factor in the global market’s shift. The report notes that while global trade continues to expand, there’s growing pushback against high prices, as evidenced by New Zealand’s export trends.

The situation in Australia provides a stark contrast, where the milk sector faces its own unique challenges. Despite improved rainfall prospects in some eastern areas, southern regions are dealing with ongoing feed shortages. This has pushed hay prices to nearly double what they were in May. As a result, culling activity has reached its highest level in over three years, and the forecast for Australian milk solids production is a 2% decline for the 2025/26 season, a critical detail for dairy economics analysts.

The complex interplay of these regional developments, combined with lingering geopolitical agendas and shifts in US fiscal policy, continues to impact commodity markets. The report concludes that while there are still unknowns, the overall trend points to a market where expanding supply is likely to outstrip demand, posing a significant challenge for the entire international dairy community in the second half of the year.

A newly released 2025 report from the International Dairy Foods Association (IDFA) unveils the remarkable economic contribution of the U.S. dairy industry.

According to the report, the dairy sector not only supports an impressive 3.05 million jobs across the nation but also contributes nearly $780 billion to the U.S. economy. This comprehensive economic impact underscores dairy’s role not just as a food supply, but as a crucial economic driver and job creator.

The vast interconnectedness of dairy farms, processors, and related industries highlights the sector’s influence on the broader economic fabric. The financial contributions from this industry also extend to public finances, generating $83 billion in taxes that bolster public services and infrastructure nationwide.

Moreover, the U.S. dairy industry’s export capabilities further solidify its stature, with $8.2 billion in annual exports, enhancing the nation’s international trade position. These findings emphasize the sector’s substantial influence, making it an essential component of both national economic health and global market presence.

In response, the IDFA aims to broaden awareness of the sector’s contributions through increased engagement in industry and public discussions.

Is the United States’ dairy industry on the brink of a new golden age of dairy trade? The International Dairy Foods Association (IDFA) thinks so.

Industry Growth Fueled by Strategic Investments – The U.S. dairy industry, a vital economic engine supporting over 3.2 million jobs and contributing nearly $800 billion to the national economy, is poised for sustainable growth. According to the International Dairy Foods Association (IDFA), the industry has committed over $8 billion to expanding processing capacities, expected to come online in the coming years.

Record Exports Fuel Optimism – The optimism is fueled by new data from the USDA revealing that U.S. dairy exports reached $8.2 billion in 2024, marking the second-highest total in history. These exports saw an increase of $223 million from the previous year, with Mexico and Canada as the top trading partners, accounting for over 40% of total exports and achieving new value records.

Challenges and Strategic Priorities – However, challenges remain. China and Southeast Asia including the Philippines, Vietnam, and Malaysia imports have dropped to their lowest levels since 2020, highlighting a need for strategic trade policies. IDFA President and CEO Michael Dykes emphasized the necessity of a trade agenda prioritizing market access and equitable conditions.

“To truly lead the global dairy market, we need trade deals that enhance market access and address existing barriers,” stated Dykes.

Future Opportunities for Expansion – Today, approximately one day’s worth of milk produced on America’s dairy farms each week is exported, or roughly 18% of all production. As U.S. milk production continues to increase over the next decade, expanding markets will become even more vital to ensure the global competitiveness of the industry and to boost the American economy.

The U.S. is currently the third-largest global dairy exporter, following New Zealand and the European Union. As production continues to rise, expanding international markets will be crucial for maintaining competitiveness and supporting economic growth. The IDFA suggests that with strategic trade agreements, American dairy could reshape the global market landscape for decades.

“Overall, U.S. dairy exports are performing well, but we can do more,” Dykes concluded.

“With new trade agreements that remove obstacles and increase market access, we wouldn’t just break records — we would redefine the global dairy landscape for decades to come.”