EU milk collections lifted by 0.8% in July and should rise by about 1.5% in August, according to a new report from Ornua.

Milk flows in the EU recovered in quarter two (Q2) led by France, Poland and Ireland, the latest Ornua Global Dairy Market Report outlined.

Irish growth appears to be slowing, and the EU annual forecast remains around 0.5%.

The global outlook for milk has improved with annual output likely to expand by 1.5%, to be driven largely by growth in the US and South America.

Milk flows across the EU lifted by 1% in July, but this was against a low base, and Ornua's annual forecast remains at +0.5%.

Global flows are stronger and should expand by 1.5%.

The market usually improves in September, but activity has been quiet, Ornua said.

Price indices fell and sentiment is bearish, it remarked.

Reports suggest there is more product available due to higher milk supply and muted demand.

With most European commodities commanding a premium, weakness was expected in Q4 and further convergence with global levels is possible.

US flows were strong in July driven by higher cow numbers and yield. Recent growth is centred on Texas, Idaho, and Kansas.

Production should continue to expand there for the remainder of the year, Ornua said.

New Zealand's supply has been strong, supported by high milk prices and favourable weather.

For the US, imports were up 6% in the first half of the year with tariff uncertainty supporting demand.

UK imports have been very strong this year, driven by cheese, butter and liquid milk.

To China, imports improved in recent months, but there has been a shift from commodity powders to fresh product.

Imports to South-East Asia are marginally higher this year. Economies are under pressure from US-China tensions.

For cheese, Ornua said that overall, activity may rebound and stabilise the European market over the coming weeks, though it is unlikely that pricing will firm significantly.

In the EU, production is strong historically. Domestic consumption is stable with retail sales offsetting sluggish foodservice sales.

Exports lifted in the first half of the year but eased in May and June.

In the US, demand is solid, but is being driven by exports. Domestic demand is sluggish with reports that consumers are eating more at home due to economic uncertainty.

In New Zealand, milk is being diverted to cheese and exports are strong, driven by Asia.

For butter, retail sales are flat in the EU, and exports are down but improving led by Irish-US shipments, Ornua said.

In the UK, pricing has been above levels on the continent with solid cream demand drawing milk from the churn.