EU milk deliveries increase, USDA FAS reports

In 2026, EU all milk deliveries are forecast to amount to 152.8 million metric tons (MMT), 0.1% above 2025 deliveries, prompted by an increase in cows’ milk production compensating for a 0.5% decline in “other” milk production (primarily from sheep and goats), according to the US Department of Agriculture’s Foreign Agricultural Service (USDA FAS). Despite lower commercial feed costs, smaller farms are being pushed out of production due to declining farm-gate milk prices, ongoing disease outbreaks and restrictive environmental regulations. This is expected to result in declining cow numbers in 2026, down 0.7% from 2025. However, this decline will be compensated by increased productivity.

As a result, cows’ milk deliveries in 2026 are forecast at 148.6 MMT, up 0.1% from 2025. Higher production observed in the first months of 2026 is forecast to slow down in the following months, as declining farm-gate milk prices paired with increasing costs of energy and fertilizers squeeze farmer profits.

The EU average farm gate milk prices started to drop sharply from the beginning of the third quarter of 2025 and in March 2026 were 6% below the five-year average, responding to elevated European production and a lack of competitiveness of the EU production on the global market. Fluid milk domestic consumption is expected to decline to 23.1 MMT in 2026, down 0.7%. With higher milk production, factory use consumption is also forecast to slightly increase by 0.2% in 2026. Therefore, dairy processors will need to determine for which products they will use available milk.

Cheese production continues to be the EU dairy processing industry’s primary goal, supported by strong domestic consumption and solid export demand. With more available milk, EU27 cheese production in 2026 is expected to increase by 0.8% over 2025 levels, reaching 11 MMT. Increasing consumption, boosted by stronger hospitality and tourism sectors, will account for most of the increased production. In 2026, cheese exports from the EU are forecast to reach 1.4 MMT, a moderate decrease of 1.5%. This is because international trade tensions and geopolitical uncertainties increasing freight costs will constrain exports, despite new trade opportunities posed by EU free trade agreements negotiated with other countries.

EU27 butter production in 2026 is forecast at 2.15 MMT, 1.4% lower than 2025, as higher revenues will favour cheese production and high butter stocks leftover from 2025 will help meet domestic and export demand. This decline in production will occur with a slight decline in domestic consumption of butter in 2026, down 1.3%. This is a decrease from the higher levels in 2025, when reduced butter prices passed on to consumers supported demand growth. 2026 EU27 butter exports are forecast to decline by 4.1% from 2025 with steady domestic consumption absorbing the majority of EU27 production and increased transport costs constraining exports.

EU27 skim milk powder (SMP) production in 2026 is forecast at 1.48 MMT, down 3.3% from 2025, due to increased cheese production lowering milk availability for other products, paired with expected weaker domestic consumption and export demand.