European dairy market: butter and WPC80 under pressure [Issue 319 of the Foodcom DAIRY Newsletter]

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The second half of September presents a mixed picture of the European dairy market. Butter prices are once again under pressure, while the milk powder market remains relatively stable. SMP is holding a stronger position than WMP, and there are signs of improvement in parts of the liquid products market.

In the cheese market, trading has clearly calmed down following earlier increases. Gouda is stabilizing, mozzarella is weaker, and Cheddar supply remains tight. In the protein segment, WPC80 continues to lose ground, demand for WPI is more subdued, while MPC85 maintains high price levels amid limited availability.

Milk powder

WMP: 3,850–3,950 EUR/MT

SMP food: 3,200–3,300 EUR/MT

SMP feed: 3,100–3,200 EUR/MT

Whole milk powder (WMP) is being offered in Europe in the range of 3,850–3,950 EUR/MT, which is wider than in the previous edition. The European market continues to remain relatively strong, although WMP is currently under greater pressure than SMP. On the international market, whole milk powder prices have also weakened slightly.

Skim milk powder (SMP) for food-grade use is priced at 3,200–3,300 EUR/MT, while feed-grade SMP is offered in the range of 3,100–3,200 EUR/MT. Forecasts for Q4 are around 3,100–3,200 EUR/MT. The overall market balance has not changed significantly, and prices remain relatively stable.
Stronger buying interest in the international SMP market is supporting this segment. European prices show no major changes, while WMP is facing greater pressure.

Cheese

Gouda: 3,500–3,550 EUR/MT

Edam: 3,400–3,500 EUR/MT

Gouda is being offered in Europe in the range of 3,500–3,550 EUR/MT, with Q4 indications at 3,500–3,600 EUR/MT. Following the price increases in early September, trading has clearly calmed down, as buyers are taking a more cautious approach to securing additional volumes. Supply and demand are currently better balanced, and greater availability may limit further significant price increases.

Edam is priced at 3,400–3,500 EUR/MT. Trading remains calmer than for Gouda, and demand is more stable.

Cheddar cheese is being offered in Europe at around 3,750 EUR/MT, while Q4 transactions are taking place in the 3,700–3,800 EUR/MT range. Availability is tighter as milk production in parts of Northern Europe is slowing, and some buyers still need to secure volumes for the remainder of the year. However, high prices are limiting their willingness to contract for their entire needs immediately.

Mozzarella has fallen to 3,450–3,500 EUR/MT, and Q4 indications fall within the same range. Seasonal demand is beginning to weaken, while some producers have increased production following a period of more favorable margins. The previous premium relative to other European cheeses has disappeared, so the market is likely to remain calm for the rest of the year.

Emmental intended for grating is being offered in the range of 3,550–3,600 EUR/MT. The broader Emmental market remains well-supplied with cheese produced earlier this year, and demand is normalizing as the previous price premium over other varieties narrows. Current production is relatively stable, and further price changes are expected to follow the broader European cheese market.

Fats

Butter: 3,850–3,950 EUR/MT

Butter in Europe is being offered in the range of 3,850–3,950 EUR/MT, while indications for Q4 are 3,900–4,000 EUR/MT. Prices are once again under pressure, and some spot transactions are taking place below 3,900 EUR/MT. Many buyers have already secured their needs, and the market still shows no clear signs of a sustained rebound.

Prices for butter and other dairy fats have also weakened on the international market. Available supply and cautious demand continue to limit the potential for price increases in Europe, and the recent improvement in the cream market has not yet translated into a clear rebound in butter prices.

Liquids

Cream: 4,800–5,000 EUR/MT

SMC: 2,800–3,000 EUR/MT

Cream is being offered in Europe in the range of 4,800–5,000 EUR/MT. Following an earlier downturn, stronger offers have appeared on the market, although the situation remains mixed. The improvement in cream prices has not yet been sufficient to trigger a sustained rebound in the butter market.

Spot raw milk in Western Europe costs approximately 45–50 EUR/100 kg. Stronger signals have emerged in parts of the market, although the scale of changes varies by region. The reasons for the recent increases are not clear-cut, and seasonally lower milk availability may be one of the factors.

Skim milk concentrate (SMC) is being offered in Western Europe in the range of 2,800–3,000 EUR/MT. Stronger trading activity in parts of the market points to upward pressure, and strong demand for milk proteins continues to influence the management of skim milk.

Whey concentrate in Europe maintains a strong price position at around 1,450–1,550 EUR/MT. Prices have risen slightly, contrasting with the weaker situation in the segment of whey concentrates with higher protein content.

Whey and Proteins

SWP food: 1,950–2,000 EUR/MT

SWP feed: 1,650–1,750 EUR/MT

Sweet whey powder (SWP) for food use is being offered in Europe in the range of 1,950–2,000 EUR/MT, while feed-grade material costs 1,650–1,750 EUR/MT. Transactions at lower prices are also appearing on the market, although forward indications remain strong. Buyers continue to secure their remaining needs on the spot market and for Q4, and demand in the broader protein segment is affecting SWP availability.

WPC80 Instant is offered in Europe in the range of 24,000–24,400 EUR/MT. The market continues to weaken as buyers are reluctant to accept current price levels, and competitive offers are increasing pressure. Western European producers are maintaining relatively firm prices, but cheaper alternatives and mounting pressure to secure Q4 contracts are weighing on the market.

Instant WPI is priced at 30,000–30,500 EUR/MT in Europe. Demand is subdued, and some buyers are considering formula changes to reduce WPI usage while waiting for more competitive prices. Producers remain reluctant to manufacture WPI without an adequate premium over WPC80, which is why its price situation remains closely tied to the WPC market.

MPC85 is being offered in Europe at around 15,350 EUR/MT and remains one of the stronger segments of the milk protein market. Availability for the remainder of the year is limited, and demand is supporting high price levels. As a result, buyers have fewer opportunities to secure additional volumes.

Whey permeate for food use is priced at 1,050–1,100 EUR/MT in Europe. Supply remains at a good level, and stronger demand has improved market balance. Prices are expected to remain largely stable or strengthen slightly.

Food-grade lactose is being offered in Europe in the range of 1,600–1,700 EUR/MT. Prices on the international market have fallen, but this does not automatically mean a similar change for European food-grade lactose. With the arrival of fall, demand related to standardization is weakening, and the availability of cheaper permeate remains a significant factor for the market in Q4.