Milk purchase prices in Germany continue to put pressure on farm profitability, despite high livestock prices. According to Agrarheute, dairy farms’ margins fell significantly in the first quarter of 2026 due to falling milk prices and high production volumes.

Milk purchase prices for farmers in March 2026 varied across the country, according to the agrarheute milk price index. In northern Germany, where prices for standard milk are currently lower than in the south, some dairies have raised their purchase prices. In the south, however, where higher prices are generally paid, some dairies have again lowered their prices or kept them stable.

Prices for standard milk have fallen by double-digit percentages since last autumn. High milk supply volumes continue to put pressure on the market, although recently prices for dairy products in Germany and internationally have shown some positive signs. For farmers, milk purchase prices, which have been falling for several months, have significantly reduced margins, reports AMI.

Dairy farmers under pressure: prices are falling — margins are shrinking

In the first quarter of 2026, the profitability of dairy farms deteriorated significantly compared with 2025, according to market experts at AMI. Since mid-2025, the monthly margin between revenue and variable costs has been under pressure.

Following an exceptionally high figure of 23.8 euro cents per kilogramme of milk in July 2025, the margin steadily declined due to falling revenues. At the same time, costs remained largely stable. Overall, by March 2026, the margin had fallen by 14.8 euro cents per kilogramme to an average of 9.0 euro cents per kilogramme of milk. Particularly significant losses were observed at the end of 2025 and at the turn of the year.

This margin must also cover labour costs, building costs and other fixed costs, which vary significantly depending on the region and the structure of the farm.

Milk prices for farmers are falling sharply, whilst beef prices have risen.

According to estimates by market experts at AMI, the revenue side was most affected by the fall in dairy product prices, which accounted for around 80 per cent of revenue in the first quarter of 2026. Since August 2025, prices are estimated to have fallen by more than 14 cents per kilogram of milk, which has had a significant impact on overall revenue. Other revenue streams have only been able to offset this to a limited extent.

Instead, the sale of livestock for slaughter and dairy herds became more significant. Whilst this accounted for around 10 per cent of income at the start of 2025, by the start of 2026 its share had risen to almost 20 per cent. This was due to a significant rise in livestock prices, coupled with a fall in milk prices. 

According to AMI, in the first quarter of 2026, prices for older cows ranged from €5.90 to €6.00 per kilogram of carcase weight. From January to March, young stock fetched an average of €169 to €205 per head. This was due to high demand and a shortage of supply. 

However, the overall income situation remained tight. According to preliminary estimates by AMI, total income in the first quarter of 2026 averaged 49.1 cents per kilogram of milk, compared with 61.5 cents per kilogram in the same period last year.

2026 got off to a poor start for dairy farmers: gross profitability fell by €1,000 per cow

According to AMI’s calculations, based on figures for January–March 2026, the average gross profit per dairy cow stands at around €850. Market experts believe this indicates a significant deterioration in the situation in 2026. 

In 2025, gross profitability was still above the average—€1,851 per cow. Even when viewed over the long term, the current level is below average: the average over the last ten years stands at €936 per cow.

Source: agrarheute