Key takeaways from the 2026 Eucolait General Assembly – reflections from a GB perspective

Close to 300 attendees, including some of the biggest European and global movers and shakers, attended Eucolait (which is the largest European dairy trade association) in their Annual General Assembly, a three-day conference including two days of market insights held in Italy in early June 2026.

Industry attendees were eager to find some market direction after what has been one of the most challenging periods for dairy markets in recent history, blighted by over-supply and falling commodity prices.

So, did we come away with a clear sense of travel? And how might this impact GB dairy farmers? As always, the answer – it depends – on what markets and what commodities you might be servicing.

Short-term bearishness driven by:

• very strong milk production growth globally
• weaker butter/fat markets
• falling milk prices
• softer economic sentiment influenced by war/macroeconomic challenges
• trade uncertainty and tariffs

Longer-term bullishness driven by:

• structurally growing global dairy demand (pop. growth, Westernised diets)
• resilience of global cheese demand
• strong protein/whey demand
• importer dependence on dairy imports
• slowing future EU milk supply growth due to regulation/environmental pressure

A major strategic theme was:

The USA increasingly positioning itself to capture global dairy export share from the EU and NZ.

• EU milk deliveries rose sharply in early 2026 (+4.7% in Q1) and another record expected to be broken for 2026. This is driven by delayed calving, less disease risk, better weather and stabilisation of the dairy herd and yield growth
• High beef/calf prices are keeping margins economic and compensating for weaker incomes from milk (but vulnerable to downturns in beef market)
• UK milk production up around +5.3% YTD April 2026
• Global milk output growth strongest in a decade. Growth occurring across all markets including recovery in Chinese milk production

• Increased competition in commodity markets
• Greater downside risk to farmgate milk prices
• Pressure on UK processors exposed to butter/SMP returns

• EU butter stocks increased strongly. Butter production up by 6.1% in 2025 and increasingly used to balance milk so stocks grown sharply
• Growing price competition from the USA who are operating at a deep discount and growing market share
• Butter prices fell to 5‑year lows with fat demand growth lagging supply growth
• Gap between fat and protein valorisation narrowed sharply

• GB processors heavily exposed to cream/butter markets may face reduced returns
• Could pressure milk values due to lower fat contribution, particularly for liquid suppliers
• Retail butter pricing may remain under pressure despite wholesale weakness

• Economic sentiment weak in major European states jeopardising demand
• Farmers’ margins deteriorating due to rising input costs including feed, fertiliser, transport and energy inflation linked to geopolitical tensions

• UK dairy consumption could weaken in more discretionary categories, will see more trading down and shifts to private label
• Higher on-farm cost inflation despite easing milk prices squeezes producer profitability, could impact farmer numbers and potentially milk supplies later in year

• US exports up nearly 18% YTD Feb 2026 according to IFCN and US are gaining commodity market share from NZ and EU
• USA sees EU protected Geographical Indications (GI) structures as trade barriers

• Greater competition in international cheese and ingredients markets
• Potential erosion of premium positioning if common-name protections weaken globally
• UK caught between EU GI systems and US pressure in future trade negotiations

• Chinese import demand stabilised rather than rebounded
• Population decline and lower birth rates highlighted as long-term headwinds
• SMP imports continue declining year-on-year
• China’s domestic production growing due to radically lowered costs of production. Now testing the market as an exporter

• Global powder market upside capped
• Slower Asian demand growth could limit export opportunities indirectly

• Tariff uncertainty now viewed as a permanent feature of dairy trade
• EU-US dairy trade exposed to:
• tariffs
• TRQs
• FX volatility
• policy unpredictability

1. UK remains exposed to geopolitical trade fragmentation.
2. Export planning becomes harder.
3. Currency volatility could strongly impact competitiveness.

• IFCN repeatedly stressed: “the world wants dairy.” Although the product mixes may change over time, fundamentally demand will grow in the medium term
• Import volumes by major dairy importers remain at record highs, it is value that has fallen which should be short-term

• Strong long-term export backdrop remains intact
• Particularly supportive for value-added UK dairy exports

• European domestic cheese demand continues growing. UK retail sales for total cheese are up by 1.4% in 52 w/e 18 April 2026 according to Nielsen
• Growing dairy products such as cottage cheese and quark demonstrate strong consumer demand for healthier proteins

• UK remains the largest export market for EU cheese – demonstrating market depth and demand resilience – opportunity to displace with domestic production
• Scope for premiumisation, healthier and speciality cheese growth

• Whey prices reached record highs in 2026
• EU SMP prices highest since 2021
• Growth linked partly to:
• protein-focused diets
• GLP‑1 drug adoption
• sports nutrition demand
• Nutrition trends shifting toward protein consumption generally

Potentially the single strongest strategic growth area discussed.

Major opportunity for:

• whey protein concentrate
• MPCs
• functional nutrition
• sports nutrition
• medical nutrition

Particularly relevant given:

• strong UK consumer protein trend
• large installed cheese-processing base generating whey streams with more mozzarella capacity to come online in future

• IFCN expects EU milk supply growth to become negative as economics weaken and environmental regulation tightens
• Including trends towards extensification; emissions schemes; peatland rewetting; environmental policy constraints

• UK could become relatively more competitive IF regulations less restrictive than continental Europe. However, permitting could cancel this out
• Potential for UK milk pool stability versus declining EU supply
• Opportunity to capture market share in nearby export markets

The conference painted a picture of a globally resilient dairy demand environment, but with significant short-term oversupply and heightened geopolitical/trade volatility.

The major strategic themes were:

• Global dairy demand remains structurally strong
• Cheese and protein demand continue to outperform
• The US is increasingly aggressive and competitive in export markets
• EU milk supply has surprised on the upside
• Butter/fat markets have weakened sharply
• Volatility is seen as structural rather than temporary

 For the UK, that means:

• defend premium niches
• grow protein/ingredient capability
• avoid overexposure to commodity butter/SMP
• and maintain export agility in a more fragmented trade environment

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