Demand from international dairy markets exceeded expectations in the first quarter (Q1) of the year, according to Ornua.

In its latest Global Dairy Market Report, Ornua attributes this to buyers seeing value at current prices.

The report notes that the ongoing war in the Middle East has also "created a sense of urgency to secure products".

Current forecasts suggest that global supplies will rise in the first half of the year, and fall in the second half.

However, Ornua said that "higher-than-expected commodity prices could soften this decline".

Ornua

Traditionally, the second quarter of the year sees strong exports which are expected to support dairy commodity markets.

The report highlights that prices in the EU and US prices are below average.

However, Ornua warned that the recent upswing could impact future demand.

"The effects of the Middle East conflict should become clearer by April, as the duration and extent of the war will determine whether the economic impacts are temporary or structural," the report said.

Milk

The report shows that global milk collections increase by around 4% in January.

Collections across the 27 EU member states rose by around 5.6% in December and by about 4.5% in January.

In the US, milk supply has been strong, increasing by a further 3.2% in January.

Ornua said production continues to expand in New Zealand where weather conditions had been favourable.