Milk Purchase Prices Forecast to Rise Toward End of 2026

After several months of falling prices, the first signs of recovery are appearing in the dairy market in the European Union (EU) and Poland. Analysts at Poland's Bank Pekao say in their market report that rising prices of butter and milk powders should support higher milk purchase prices paid to farmers in the last months of 2026. This matters for milk producers, who have been operating under price pressure.

Production growth is slowing

According to Pekao, milk output in the world's four largest dairy exporters was 2.7% higher in the second quarter of 2026 than a year earlier. That is a clear slowdown from the previous two quarters, when growth exceeded 4%.

In the EU, deliveries of raw milk to processing plants rose 2.3% year on year in the second quarter, compared with growth above 4% a quarter earlier. In the first quarter, all ten of the EU's largest milk-producing countries increased output, but in the second quarter two of them already recorded an annual decline. Analysts see this as a possible early signal that milk supply on the EU market is gradually being curbed. Poland remains one of the main drivers of production growth in the bloc.

Skimmed milk powder prices climb sharply

More raw milk translates into higher output of dairy products. At the same time, foreign demand revived in the second quarter, especially for skimmed milk powder, which reduced its availability on the internal EU market.

According to data cited by Pekao, in September 2026 Polish processors received prices for skimmed milk powder that were 46% higher than in January and 22% higher than a year earlier. Butter prices also improved, although they remained below last year's levels. On the global market the picture is mixed: cheese and butter prices stayed relatively stable, while skimmed milk powder clearly gained value.

Farm-gate prices begin to recover

In August 2026, the average purchase price of milk in Poland rose 3% compared with July. Despite the increase, milk was still clearly cheaper than a year earlier. Pekao analysts expect butter and milk powder prices to keep rising in the final months of 2026, which should support further increases in purchase prices. The forecast remains dependent on changes in raw milk supply and demand for dairy products. For now, signs of a rebound are visible, but it will take some time before purchase prices return to last year's levels.