European Union: Dairy and Products Semi-annual

The 2026 European Union (EU) milk production is forecast to increase slightly to 152.8 million metric tons (MMT), from an estimated 152.7 MMT in 2025, despite declining cow numbers. 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 farmers' profits. As a result, dairy processors will need to determine for which products they will use the available milk. Cheese production is forecast to remain the primary output goal of the EU dairy processing industry, supported by solid domestic consumption and export demand. EU27 cheese production is forecast to reach 11 MMT in 2026, up by 0.8 percent from 2025. However, this increase comes at the expense of the production of butter, skim milk powder, and whole milk powder.