Asia
Across Asia, farmgate milk prices in the second half of 2025 held firm and even strengthened, mainly because global dairy demand stayed steady and export sales remained solid. In New Zealand, the season’s milk price forecast was lifted, supported by strong dairy trade results and good sales coverage.
Farmers in the region also benefited from excellent weather and improved margins, which helped production recover after earlier tightness in global supply. Even as other regions faced falling commodity prices, Asia’s farmgate returns remained resilient, helped by expectations of stable global markets and confidence from major processors.
Europe
European farmgate prices in H2’25 came under pressure, even though milk production in some countries had only just started to pick up again. Europe carried a premium on key dairy commodities compared with the US and Oceania, which made its products less competitive and encouraged cheaper imports into the region.
As global milk supplies rose including in the US and New Zealand; European wholesale prices fell sharply, especially for butter and cheddar. This placed processors under strain as they tried to cover higher milk costs while facing weakening market prices. Overall, European farmgate milk returns softened, driven by growing supplies, falling commodity values, and intensifying global competition.
North America
In North America, farmgate milk trends were mixed. The United States saw strong growth in milk production, thanks to larger cow numbers and higher yields, which added to global supply and contributed to weaker commodity markets. These rising volumes increased pressure on prices toward the end of H2’25. In Canada, however, the situation was different: the national pricing body decided to raise the farmgate milk price for early 2026 after reviewing costs faced by producers. Higher feed and labour expenses meant farmers needed some relief, so prices were adjusted upward, even though inflation had eased. As a result, North America overall saw growing output pushing prices down in the US, while Canada prepared for a moderate price rise.
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Asia
In the first half of 2025, Asia’s farmgate milk prices experienced slight upward movement, particularly in Australia. The boost followed the end-of-year review and improved seasonal demand, especially during the holiday trading period. Dairy companies like Bulla increased their prices in response to solid business performance and a need to support farmers facing rising input costs and erratic weather.
The move aimed to maintain competitiveness and secure milk supply through the back half of the season. Although cost pressures remained, the Australian dairy sector showed resilience, benefiting from relatively stable domestic consumption and export opportunities.
Europe
European milk prices stayed largely stable during H1’25, with most major UK processors holding their prices steady through May. Arla, First Milk, and Müller maintained consistent payments, even as global market signals became more mixed. The UK saw a modest increase in milk production, helped by good forage conditions and a slight improvement in winter dairy economics.
However, processor commentary reflected growing caution due to signs of longer-term market volatility. Organic milk maintained stronger pricing, supported by niche demand and higher input costs. Still, the industry remained sensitive to changing global commodity trends and retail consumption patterns.
North America
In North America, milk pricing in H1’25 reflected a balancing act between rising production costs and steady consumer demand. While detailed figures were not provided, trends suggested that U.S. dairy prices were influenced by strong spring flush volumes and relatively stable retail markets. Feed prices and labor availability continued to challenge margins, prompting some regions to reassess sustainability and pricing models. Despite these pressures, farmgate prices stayed generally firm due to disciplined supply management and ongoing processor support.
Farmgate Milk price refers to the price received by the farmers directly from processors for the milk produced on farm. In several countries, government has no legislative control over the prices given by the milk processing companies to the farmers. For instance, in Australia, farmgate milk prices are decided on the basis of milkfat and protein content present in it, with different prices for each component. Further, these prices may vary between processors, and competition for milk among processors also influence farmgate milk prices from one season to another.
CLAL S.R.L, Dairy Australia Corporation, Australian Department of Agriculture, Water and the Environment, Fonterra Co-operative Group Limited, Agriculture and Horticulture Development Board
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