The pressure on global dairy markets continues as both Kerry Dairy Ireland (KDI) and Lakeland Dairies have reduced their December 2025 milk prices, marking the fifth consecutive month of downward revisions.
Driven by excess global supply, elevated inventory levels, and weakened demand, particularly from foodservice and export markets, these reductions reflect the challenging economics facing dairy producers across Ireland and Europe.
Kerry Dairy Ireland: Fifth Monthly Price Reduction
KDI has announced a reduction of 2.87c/l (excluding VAT) for December milk, bringing the base price to 31.67c/l. This follows a 3.32c/l cut in November, further intensifying the downward trend.
At standard EU constituents (3.40% protein and 4.20% butterfat), the price translates to 36.14c/l (excluding VAT). Adjusted for average national solids in Ireland for December and incorporating quality and sustainability bonuses, the return reaches 42.44c/l (excluding VAT).
Lakeland Dairies: Price Drop with Support Payments
In the Republic of Ireland, Lakeland Dairies has set a price of 33.25c/l for December milk, based on 3.6% butterfat and 3.3% protein. This includes a 0.5c/l Sustainability Incentive Payment, and represents a 3c/l drop from November’s 36.25c/l.
Farmers qualifying under Lakeland’s scheme will also receive an out-of-season payment in addition to the base rate. A further loyalty payment of 0.3c/l on all 2025 supplies in the Republic of Ireland and 0.25p/l in Northern Ireland has been announced as part of broader producer support.
In Northern Ireland, the December milk price has been reduced to 26.3p/l, down from 28.8p/l in November. This figure also includes the applicable sustainability bonus.
Market Context: Oversupply Meets Weak Demand
Both processors have cited significant pressure from surplus milk volumes across Europe and other major producing regions. Inventory buildup and continued mismatch between production and consumption have kept prices subdued.
Despite these cuts, the first Global Dairy Trade (GDT) auction of 2026 brought some optimism, posting a 6.3% increase in the price index, rising from 1,008 to 1,072. This breaks a nine-auction streak of declines since August 2025.
Whether this signals a sustained recovery or a temporary adjustment remains uncertain, as broader economic challenges and cost-of-living constraints continue to dampen global dairy demand.
Implications for Dairy Producers
These developments are likely to place additional financial strain on farmers, especially during the winter months when production costs typically rise. While bonuses and loyalty payments offer some relief, the continued erosion of farmgate prices highlights the need for further cost optimisation and market diversification across the supply chain.
The coming months will be critical as processors and producers monitor the GDT trend, shifting consumer behaviour, and global inventory movements to reassess procurement and pricing strategies.
