Global milk production trends are beginning to diverge, with the United States maintaining stronger output growth while Europe and New Zealand experience a more noticeable slowdown. September 2026 production figures indicate that American dairy farmers continue to expand milk supplies, whereas changing weather conditions, declining farm margins and production uncertainties are influencing output across other major dairy-exporting regions.
According to a November 5 analysis by Hoard’s Dairyman Intel, US milk production increased by 2.6% in September compared with the same month last year. When adjusted for higher milk fat and protein concentrations, the increase reached 3.5%, indicating that improvements in milk composition are contributing significantly to overall dairy output.
The analysis expects American milk production growth to remain above average through the remainder of 2026 and well into 2027, supported by an expanding dairy herd.
US Dairy Production Maintains Strong Growth Momentum
The United States continues to demonstrate comparatively strong milk production growth, supported by an increase in dairy cow numbers and improved milk components.
September production exceeded the forecast presented in the analysis, with component-adjusted growth reaching 3.5%. Although this represents a moderation from the 5.7% increase recorded in the fourth quarter of the previous year and 3.9% in the first quarter, the overall production trend remains positive.
Over the past two years, US dairy farmers have expanded the national dairy herd by approximately 421,000 cows, representing a 4.5% increase.
This expansion is expected to support continued milk supply growth in the coming months. The larger number of dairy animals means that production is unlikely to slow rapidly, even if individual farm productivity or market conditions change.
Higher domestic milk availability could also influence the competitiveness of American dairy commodities, particularly butter and cheese, in international markets.
European Milk Production Growth Slows Significantly
In contrast, milk production across the European Union and Britain has experienced a substantial slowdown.
The September 2026 figures indicate that combined milk output increased by just 0.2% compared with the same period last year. With milk fat and protein concentrations estimated to have remained unchanged, component-adjusted production growth was also approximately 0.2%.
This represents a considerable decline from the 3% growth recorded during the second quarter and 5.5% during the first quarter.
Several factors have contributed to the slowdown. The strong production expansion during 2025 and early 2026 was partly influenced by comparisons with periods affected by bluetongue disease in 2024 and early 2025. Additionally, favourable farm profitability during 2025 encouraged stronger milk production.
However, conditions became more challenging during 2026 as milk prices declined and feed costs increased.
France and Britain were particularly affected by hot and dry summer conditions, which placed additional pressure on dairy production. Reduced farm profitability has also weakened incentives for production expansion.
The analysis suggests that Europe’s dairy herd contracted less than usual during September, although the overall production outlook remains relatively subdued.
New Zealand Faces Weather-Related Production Uncertainty
New Zealand, another major international dairy exporter, has also recorded slower production growth.
Milk solids production increased by 1.9% in September, slightly below the forecast and significantly lower than the growth rates exceeding 6% recorded during both the first and second quarters.
Despite increasing production costs, New Zealand dairy farmers continue to benefit from relatively favourable milk prices. The season’s milk price is heading towards its second-highest level on record, supporting positive farm margins.
Improved profitability, newly operational dairy farms and some relaxation of environmental restrictions have encouraged additional farms to enter or expand dairy production.
Fonterra suppliers have also benefited from additional cash distributions following the co-operative’s disposal of certain assets.
Favourable weather conditions through October further supported production growth. However, the potential impact of El Niño during the second half of the production season remains a significant concern.
Historically, New Zealand has struggled to maintain milk production growth during El Niño episodes in the fourth and first quarters.
The analysis expects production to decline by approximately 1.7% during the first quarter under its central forecast, although the actual impact will depend on weather severity. A continuation of the earlier 6% growth rate is considered unlikely.
Global Dairy Supply and Price Outlook for 2027
The changing production patterns across major dairy-exporting regions could influence international dairy commodity prices over the coming months.
While US production is expected to remain relatively strong, slowing output in Europe and potentially declining production in New Zealand could moderate overall global supply growth.
According to Hoard’s Dairyman Intel, weaker global supply expansion could provide support for dairy prices if international demand remains stable.
The United States may continue to benefit from higher domestic production, potentially keeping American butter and cheese prices below those of competing exporting countries.
Nevertheless, stronger international dairy prices could provide additional support to US dairy commodity values during 2027.
Implications for the Global Dairy Industry
The September production figures highlight the growing differences in dairy supply conditions across the world’s major exporting regions.
The United States is entering the coming year with a relatively strong production base, while European farmers face tighter margins and New Zealand producers remain exposed to weather-related uncertainties.
For dairy processors, traders and milk producers, these developments will be important in determining commodity availability, export competitiveness and farmgate milk price movements.
Ultimately, the balance between production growth and international demand will remain a key factor shaping the global dairy market throughout 2027.