European dairy market: cheese and SMP prices rise as milk supply dwindles [317th Edition of the Foodcom DAIRY Newsletter]

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As September begins, several segments of the European dairy market are strengthening. Lower availability of liquid milk is supporting cheese and milk powder, while cream continues to hold a strong position. Butter, however, remains under pressure from high inventories and good product availability.

Cheese prices are rising, particularly for Gouda and Cheddar, while Mozzarella is supported by limited availability on the spot market. In the protein segment, the situation is more varied: MPC85 maintains a strong position, while buyers of WPC80 remain cautious, and greater differences are evident between individual regions of Europe.

Milk Powder

Whole milk powder (WMP) is being offered in Europe in the range of 3,750–3,850 EUR/MT. Reduced milk availability is supporting prices, but higher price levels are attracting more offers to the market. This may limit further increases as Q4 approaches.

Skim milk powder (SMP) for food use is priced at 3,150–3,250 EUR/MT, while feed-grade SMP is priced at 3,250–3,350 EUR/MT. In Eastern Europe, SMP for food-grade use is being offered in the range of 3,150–3,250 EUR/MT. Prices have risen amid limited milk availability and strong demand; however, the increased number of sellers at higher price levels makes the future direction less clear.

Cheese

The European cheese market has strengthened amid limited milk availability and fewer volumes on offer. Gouda is priced at 3,450–3,550 EUR/MT. Stronger demand for Q4 and limited availability of young cheese are supporting prices. More offers have appeared at higher price levels, but sellers have little incentive to contract for forward deliveries below current spot prices.

Edam is being offered in the range of 3,250–3,350 EUR/MT. Trading remains calmer than for Gouda; demand is more stable, and there is no comparable buying pressure related to Q4.

Cheddar cheese is priced at 3,550–3,650 EUR/MT. Production is seasonally declining, and lower milk production in continental Europe reinforces the outlook for a stronger market in Q4. Producers are taking a more cautious approach to forward sales, though higher price levels are attracting new offers, and some buyers are returning to secure the remaining volumes they need.

Mozzarella is being offered in the range of 3,600–3,700 EUR/MT. Availability on the spot market is limited, and demand continues to support prices. The current premium relative to other cheese categories may narrow as seasonal conditions change, so prices may be more stable than those for Gouda or Cheddar.

Grating-grade Emmental is priced at 3,650–3,750 EUR/MT. Production is constrained by reduced availability of cheaper spot milk, while demand remains stable. Consequently, supply conditions are currently having a greater impact on prices than a significant increase in consumption.

Quotes for Q4 are already appearing above current spot levels. Fresh Gouda quotes are reaching around 3,800 EUR/MT and higher, and quotes for Cheddar cheese curd are also moving to higher levels. The outlook remains closely tied to milk availability, although the current situation does not indicate a serious shortage of European cheese in Q4.

Fats

Butter in Europe is being offered in the range of 4,000–4,150 EUR/MT, while butter from Eastern Europe costs around 4,550–4,650 EUR/MT. This remains one of the weaker segments of the dairy market, primarily due to high inventories and good product availability.

At the same time, the situation in the cream and milk markets is tighter. This keeps butter production costs high, but high inventories continue to limit the potential for more significant price increases.

Liquids

Cream is being offered in Western Europe at 5,100–5,200 EUR/MT and in Eastern Europe at 5,400–5,500 EUR/MT. Lower milk availability and greater competition for milk components are supporting the market. Higher cream prices are also driving up the production costs of fresh butter, and for some producers, selling cream and skim milk concentrate may be more attractive than further processing.

Spot prices for raw milk are around 44–48 EUR/100 kg, with variations depending on the region, milk composition, and delivery terms. The reduced availability of cheaper milk is having an increasingly noticeable impact on the production costs of powders, cheese, and cream. Seasonal milk production will remain an important factor for prices in Q4.

Skim milk concentrate (SMC) is being offered in the range of 2,950–3,050 EUR/MT. Availability is limited, and higher SMC prices continue to drive up SMP production costs.

Whey concentrate is priced at around 1,400–1,500 EUR/MT. The market remains strong as rising protein production continues to influence the use of liquid whey, with a larger portion of the raw material being directed toward higher-value ingredients.

Whey and Proteins

Sweet whey powder (SWP) for food use is offered in Europe in the range of 1,900–2,000 EUR/MT, and in Eastern Europe at 1,850–1,950 EUR/MT. Feed-grade material costs 1,700–1,800 EUR/MT. Offers for Q4 are already appearing at higher levels, and sustained demand for WPC production is influencing how liquid whey is utilized.

WPC80 Instant is offered in Europe in the range of 25,500–26,500 EUR/MT, while in Eastern Europe it is 24,500–25,500 EUR/MT. Regional differences are pronounced, and greater selling pressure is evident at lower price levels in Eastern Europe. Buyers are approaching current prices cautiously, and available inventories and cheaper alternatives are limiting the potential for a stronger recovery in trading activity. Negotiations for Q4 are proceeding slowly, and the market’s direction remains uncertain.

Instant WPI is priced at 31,000–32,000 EUR/MT in Europe. Global demand for milk proteins remains high, but as additional supply enters the market, competition is intensifying. Buyers are carefully assessing their needs ahead of Q4.

MPC85 is being offered in Europe at 14,500 EUR/MT and remains one of the better-supported segments of milk proteins. Demand for milk proteins is high, availability is limited, and a large portion of the volumes available for the remainder of the year has already been sold. Reformulation away from WPC continues to support demand for milk proteins.

Whey permeate for food use is priced at 1,050–1,150 EUR/MT. Supply is ample, but with protein prices remaining high, buyers continue to view permeate as a cost-effective whey ingredient.

Food-grade lactose is offered in the range of 1,650–1,750 EUR/MT. Demand is supported by the need for milk powder standardization, and the ratio of lactose to other whey-derived ingredients continues to influence purchasing decisions. The market is expected to remain relatively stable in the near term.