European Dairy Market: SMP Gains Ground, WMP Under Increased Pressure [Issue 312 of the Foodcom DAIRY Newsletter]

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In the 312th issue of the Foodcom DAIRY newsletter, we analyze the situation on the European dairy market at the end of July. Individual segments are developing in different directions. High butter inventories continue to limit the potential for a stronger rebound, even though cream prices have risen and become more volatile. SMP has strengthened due to reduced availability of cheaper skim milk concentrate (SMC), while WMP is facing growing competition and weak demand in Europe.

The market for liquid dairy products remains heavily dependent on weather conditions. Persistently high temperatures may continue to limit milk supplies and nutrient content, supporting prices for liquid products. Cooler conditions, however, could weaken some of the current price support.

The protein market remains generally strong but mixed. WPI availability is becoming increasingly limited, WPC80 is slightly easier to source, and MPC85 has seen a slight correction. Buyers are becoming increasingly cautious about current price levels and are hedging their required volumes more selectively.

Milk Powder

Whole milk powder (WMP) is being offered in the range of 3,400–3,450 EUR/MT. Skim milk powder (SMP) for food use is priced at 2,750–2,850 EUR/MT, while feed-grade SMP is available at 2,650–2,700 EUR/MT for delivery in Q3.

Demand for WMP remains selective. Limited activity in the European market and stronger competition from other supply sources are reducing the scope for further price increases.

Greater availability of WMP on the international market further weakens the outlook for the European product. Milk production remains high in New Zealand and Latin America, allowing suppliers in those regions to offer more competitive product. As a result, European WMP is less attractive in many export markets.

Weather conditions may also influence the future trend. El Niño could bring higher temperatures and drier conditions to key milk-producing regions, though the impact of this phenomenon on production volumes remains uncertain. For now, greater availability on the international market and the possibility of weakening demand in China later in 2026 continue to limit growth potential.

SMP has strengthened as the availability of cheaper skim milk concentrate has declined. High processing costs and demand for milk proteins are providing support for prices. However, current supply remains balanced, so the scope for significant growth is limited.

In the short term, the market appears relatively stable. Prices may continue to move sideways until purchasing activity increases significantly or supply expands.

Cheese

Gouda is being offered in the range of 3,050–3,150 EUR/MT, while Edam prices range from 3,000 to 3,100 EUR/MT. Mozzarella remains at a strong level of 3,400–3,500 EUR/MT, and Cheddar cheese is available in the range of 3,300–3,400 EUR/MT.

Individual segments of the cheese market are moving in different directions. Cheddar remains under pressure due to rising production in Europe and the United States, while mozzarella is finding stronger support.

Reduced milk availability and high raw material costs on the spot market are keeping production costs elevated. This limits the possibility of lower offers, particularly for Gouda and Edam.

The European Cheddar market remains relatively stable, although rising production continues to put pressure on international trade.

Not all buyers of Gouda and Mozzarella have yet secured their full requirements for late July and August, which helps keep prices firm. Continued high temperatures could provide the market with additional support, while a faster recovery in milk supply would weaken this effect.

Fats

Butter is being offered in the range of 3,900–4,050 EUR/MT. The market continues to clearly distinguish between older stocks sold at lower prices and fresher product, for which offers are closer to the upper end of the range.

Butter stocks remain at historically high levels, and many buyers have already secured a significant portion of their needs. With limited demand for immediate deliveries, this continues to put pressure on prices, despite temporary support from higher-priced and more volatile cream.

The recent rise in cream prices briefly improved market sentiment. However, this effect may fade if milk supplies return to more normal levels and cream availability improves.

The outlook for the second half of the year remains cautious. High production and large inventories continue to limit the potential for a sustained rebound. Increased buying activity for forward contracts may limit the scale of potential declines, but stronger demand would be needed for a more pronounced improvement.

Liquids

Cream is being offered in the range of 4,250–4,350 EUR/MT following a period of greater volatility linked to high temperatures. Skim milk concentrate (SMC) remains at 3,100–3,200 EUR/MT.

In major European markets, spot prices for raw milk continue to hover around 40 EUR/100 kg, with some offers exceeding 50 EUR/100 kg. These levels are maintaining cost pressure on milk powder and cheese producers.

Weather remains the main factor influencing the European market for liquid dairy products. The ongoing heat wave may continue to limit milk supplies and the content of its components, while cooler conditions would reduce some of the current price support.

Whey concentrate remains in the range of 1,450–1,550 EUR/MT. An increasing proportion of the raw material is being diverted to higher-value protein applications, leaving less liquid whey available for standard powder production. This keeps whey protein concentrate (WPC) production costs high despite limited demand for immediate delivery.

Whey and Proteins

Sweet whey powder (SWP) for food use is offered in the range of 1,700–1,800 EUR/MT, while material for feed use costs 1,400–1,450 EUR/MT. Trading remains limited, as a significant portion of demand for Q3 and Q4 has already been secured.

High costs for liquid whey continue to support current price levels, though buying activity is not strong enough to drive a significant increase.

WPC80 Instant is being offered in the range of 26,500–27,500 EUR/MT. Availability has improved slightly, but total volumes remain limited. At current prices, buyers are becoming increasingly cautious.

WPI Instant remains at 31,000–31,500 EUR/MT. Available volumes are declining as part of the production capacity is being redirected toward WPC80. Demand remains strong, but buyers are showing less and less willingness to accept further price increases.

MPC85 is being offered in the range of 11,500–12,000 EUR/MT following a slight adjustment. Demand for milk proteins and ongoing work on formulation changes continue to support this product, particularly in applications where lactose availability is limited.

Food-grade whey permeate remains at 1,000–1,050 EUR/MT. Lower production in Europe is supporting local prices, though high availability on the global market limits the potential for further increases. The price difference between permeate and SWP remains a significant factor for buyers considering the use of substitutes.

Food-grade lactose is being offered in the range of 1,550–1,650 EUR/MT. Production in Europe remains limited, and some of the available volumes have already been secured for Q4.

The protein market remains generally strong, but individual products are trending in different directions. WPI availability is becoming increasingly limited, WPC80 is somewhat easier to source, and MPC85 has weakened slightly. Buyers continue to make more selective purchasing decisions, especially at current price levels.