Dairy markets are entering a bearish phase, with oversupply and diverging expectations shaping short-term dynamics. While New Zealand, Australia, and Uruguay anticipate record milk flows, and Argentina recovers strongly after years of decline, global demand signals remain uncertain, raising the risk of prolonged price pressure into Q4 2025.
A bullish market is a period in which the prices of financial assets, commodities, etc., experience sustained growth.
A bearish market is one in which the prices of assets or commodities fall over a certain period of time.
The past two weeks have been among the most active in the dairy products market. Liquidity is abundant and volatility remains high, but there is no clear consensus in the major markets. The fourth quarter is traditionally bullish (for Europe and the U.S.), supported by strong demand and lower production. However, the market remains divided: many participants expect a rebound, while others believe last week’s price decline was justified.
Global Dairy Trade
This week was decisive. Bulls can no longer argue that buyers are “still on vacation,” while bears risk an oversold market if demand returns in the fourth quarter. With this Tuesday’s GDT auction, participants anticipated the last quarter: too much product in the market.
New Zealand (as well as Australia) is expecting an exceptional spring for milk production. The price offers received by farmers, combined with abundant forage, create the ideal conditions for a strong increase in milk output.
Uruguay
Uruguay is also experiencing a very favorable spring for cow feeding, resulting in a significant increase in milk production. In August 2025, milk intake at processing plants reached a level that had originally been expected for October.
Argentina
After two very difficult years, the Argentine dairy sector is looking to close 2025 on a very positive note. We do not believe that the lack of government intervention was a determining factor in this growth.
Business conditions for primary milk production have been very favorable. Farmgate milk prices have been attractive, input/output ratios (with potential turbulence in the last quarter), and excellent forage conditions point to a positive 2025 outcome.
On top of these indicators, many producers have adopted technological upgrades, including the incorporation of milking robots and improvements in cattle feeding practices. A positive result is also expected in the growth of the national milking herd.
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