Global supply signals have been mixed across major producing regions. In the United States, milk production is on the rebound, up 3.3% in June, thanks to rising cow numbers and improved yields following last year’s avian influenza outbreak. Conversely, Europe is facing more significant challenges from a bluetongue outbreak and drought conditions, which are weighing on milk volumes and raising long-term concerns about replacement heifers.

New Zealand, however, is bucking the trend. Favorable weather conditions, especially on the South Island, are supporting strong pasture growth, leading to a surge in milk volumes, up 14.6% year-on-year. This increase is a direct result of strong farmgate prices incentivizing supplementary feeding. While rising volumes on the GlobalDairyTrade (GDT) platform have put some pressure on prices, strong purchasing interest from key export markets is helping to limit a sharp decline.

While China has maintained stable import volumes, it has specifically increased its purchases from New Zealand by 6%, opting to import less from the Northern Hemisphere. Other Asian markets, like South-East Asia and Japan, have also shown robust demand, with import volumes increasing by 3.3% and 4.3% respectively. This strong demand for Oceania dairy is proving to be a critical factor in supporting export prices.