A stabilised but well-supplied global market is weighing on organic returns across Denmark, Sweden and Central Europe, while EU production stays robust and butter markets show signs of renewed optimism heading into spring.

Arla has decided to keep its conventional milk price unchanged for March 2026. However, organic producers in most of the cooperative’s core markets – including Denmark, Sweden and Central Europe – will see a reduction of 0.15 DKK per kilo in the acontoprice. The UK market is not affected.

The adjustment reflects a broader shift in market conditions rather than a sudden demand collapse. Global milk supply has stabilised at a relatively high level, while retail prices are gradually adjusting following earlier periods of lower commodity prices. The timing and magnitude of these adjustments vary across markets and product categories.

Strong EU supply at the start of the year
Milk production in the EU and the UK has remained robust in early 2026. Germany and France in particular are reporting significantly higher volumes compared to last year, supported by favourable yields and high fat and protein contents.

In contrast, US milk growth is slowing as herd expansion has stalled. New Zealand remains above last year’s production levels despite unstable weather conditions.

Mixed but stable product markets
On the product side, European cheese markets are showing renewed strength after a weak end to 2025. Milk powder markets have started the year on a stable footing, supported in part by strong Chinese purchasing activity ahead of the New Year.

Butter markets have seen a notable shift, with rising futures prices in week 6. According to Arla, this development appears to be driven more by improved market sentiment than by fundamental changes in supply and demand.

By Maja Løvstrup
Photo: Arla Foods