Ornua's latest report found that strong results from the Global Dairy Trade (GDT) have led to a "more positive market sentiment than anticipated”.

It continued: “Typically, the first quarter experiences lower demand; however, at current prices, some buyers are recognising value and are taking the opportunity to replenish inventories.

“Additionally, certain buyer behaviour suggests concerns about supply security rather than immediate scarcity."

Last month’s report noted that commodity prices have likely reached their lowest point and should stabilise in the first quarter.

Ornua said: “While buyer engagement has increased, caution remains as they recognise it will take time for global milk supply to decline.

“Although it appears likely that European commodity prices have found a floor, it remains unclear how much prices will rise for the remainder of the first quarter.”

Following an increase of 2.5% in 2025, global milk supply is expected to grow by about 1% in 2026, according to the most recent report.

Ornua also found that while growth of about 3% is expected in the first half of 2026, output is likely to decline in the second half.

Milk supply

Looking at global exporters, the co-op found that collections rose by about 4.7% in December, with flows expanding across most regions.

For the EU, collections lifted by about 5.3% in December. The report said that supply “remained robust in the fourth quarter, driven by enhancements in margin and yield-per-cow”.

Staying with the EU, Ornua added: “While growth may have peaked, collections are projected to increase in the first half of 2026, before tapering off in the latter half of the year.

"Overall, annual supply is expected to increase by 0.5%.”

In Ireland, milk supply increased by 5.0% in 2025 compared to a weak base. Volumes were similar to 2022 levels.

In the UK, the report found that “flows have been robust, with output lifting by 5.2% in December”.