Latest trends shaping the European dairy market this April [263rd Edition of the DAIRY Newsletter]

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Trends in the dairy market this week highlight a fall in prices for skimmed milk powder, cheese and butter, while cream and protein powders remain stable. Spot bids for key products such as Gouda, Edam and Mozzarella are decreasing as buyers delay purchases. Milk consumption is increasing seasonally, putting pressure on several categories. Find out the latest prices and trends in powders, cheeses, fats, liquids and whey products.

Let’s take a look at what’s been happening in the dairy market lately!

Milk powders

Skimmed milk powder (SMP) prices in Europe have fallen slightly and are now fluctuating between €2350 and 2350-2400 EUR/MT EXW, depending on the origin and age of the product. Although the official spot ranges remain unchanged, sentiment is softening, with more offers appearing towards the lower end.

Bulk feed SMP remains stable at 2400-2450 EUR/MT, with Q2 and Q3 DAP NL deliveries at around 2450 EUR/MT. However, the outlook for the feed segment is becoming increasingly cautious due to a combination of factors, including declining dairy cow numbers and ongoing bluetongue outbreaks. As a result, demand from the calf milk replacer industry is expected to weaken in the coming months.

At the same time, milk consumption across Europe continues to rise seasonally, adding another layer of uncertainty to the market. While current prices remain supported, it is unclear how the product will perform in the coming weeks, especially if supply continues to increase and demand remains subdued.

Cheese

The European cheese market is at a standstill, with limited spot activity and buyers largely sidelined after Q2 coverage ended. Gouda 48% cheese prices have fallen to 4250-4350 EUR/MT and many buyers are waiting for price corrections after Easter before deciding to buy volumes in May or Q3. Producers are reporting stable operations but are starting to offer more flexibly in anticipation of a more competitive environment.

Edam 40% is following a similar trend, with spot prices ranging between 4300-4350 EUR/MT. While stocks remain under control, buyer interest is showing signs of wavering as market participants wonder if prices may have already peaked. The tone is cautious and sellers are starting to adjust expectations accordingly.

Pressure is growing on mozzarella, with bids currently in the 4150-4250 EUR/MT range. Although stock levels are manageable, aggressive US mozzarella prices in key Asian and African export markets are affecting sentiment in Europe.

Emmental for slicing remains stable at 5100-5300 EUR/MT, although the premium for slicing quality has reduced to around 200 EUR/MT as more high specification products enter the market, putting little downward pressure on prices. Buyers are showing increased caution in locking in volumes as their own sales appear to be slightly lower amid ongoing inflationary pressures.

European cheddar (cottage cheese/young cheddar) has fallen, trading in a range of 4750-4850 EUR/MT, pressured by increasing availability from Ireland and Eastern Europe and fierce global competition from US-sourced cheddar. Although exports are still possible, volumes are under threat as US cheese continues to dominate key import markets.

Fats

EU butter prices have further declined and are currently at 7200-7300 EUR/MT EXW, with additional pressure expected in the short term. Despite lower cream costs encouraging production, buyers remain selective and fresh offers are limited. Butter of Ukrainian origin is offered at more competitive levels around 6800-6900 EUR/MT, but spot availability is sporadic. As Easter approaches, some buyers are looking to finalise deals, but the tone of the market remains cautious.

Anhydrous milk fat continues to follow the broader fat complex and remains stable above 9000 EUR/MT, supported by limited production in both Europe and the US. While fat prices are generally elevated, the softening of butter signals a potential plateau if milk production continues to increase.

Liquids

Cream prices remain stable and high across Europe. Current spot levels for 40% cream are quoted between 8600-8800 EUR/MT FCA, reflecting steady demand with limited fresh volumes available. Based on these prices, theoretical butter yields range between 7250-7300 EUR/MT, although actual plant margins vary depending on cream yield and origin. Volatility may continue to emerge as Easter approaches, but no major movements were seen last week.

SMC also showed signs of weakening, currently trading in the 1850-1950 EUR/MT FCA DE range, particularly for products of German origin. While production remains stable, increased milk availability and a drop in demand for powder are affecting the tone of the market.

Spot milk prices remain relatively stable. In the Netherlands, milk is quoted at 51,50 EUR/100 kg (4.4% fat), while in Germany prices are 48,00 EUR/100 kg (3.7% fat) in both the north and south. Milk consumption continues to increase seasonally, but long-term expectations for Q2 and Q3 are becoming more conservative. The spread of foot and mouth disease (FMD) in Slovakia and Hungary, now with nine confirmed cases, has prompted Austria to take precautionary measures, including the closure of 24 border crossings.

Whey powder

Sweet whey powder(SWP) remains unchanged across Europe, with spot levels remaining at 1100-1120 EUR/MT. Buying interest is limited, with most stakeholders expecting downward pressure on milk prices in the coming weeks. SWP feed has softened slightly, currently quoted at 880-900 EUR/MT CIP in mid-July, while forward Q2/Q3 deliveries to the Netherlands are seen at 870 EUR/MT DAP.

Spot sweet whey concentrate continues to show extreme volatility, with offers ranging between 300-500 EUR/MT FCA depending on quality and product availability. Despite occasional oversupply, end-user demand remains weak.

European WPC80 instant remains at elevated levels, with prices in the 11800-12000 EUR/MT range, with sporadic Polish offers approaching EUR 11400-11500 EUR/MT. The global protein market is rapidly absorbing European product, particularly in Asia and South America, and Q2 volumes are mostly committed. WPI is also tight, with EU-origin product trading around EUR 22500 EUR/MT, with limited availability. Although US-origin WPI is showing up in selected European bids, this is not yet having an impact on prices due to the continuing uncertainty over retaliatory tariffs.

What’s new

North America

US President Donald Trump’s administration has announced new tariffs on products imported from the European Union, including cheese and dairy products. These tariffs could affect the competitiveness of Polish dairy products in the US market, leading to a decline in exports. Additionally, the European Union is considering retaliatory tariffs on US agri-food products, which could exacerbate trade tensions and affect the stability of export markets for Polish dairy producers.

Therefore, the Polish dairy sector should monitor developments and be ready for possible changes in trade policy that may affect dairy exports.

Europe

Danish company Arla Foods is planning a merger with German company DMK Group to create Europe’s largest dairy cooperative, with more than 12,000 farmers. The new company, operating under the name Arla, will be based in Denmark with annual revenues of around €19 billion. Peder Tuborgh, Arla’s current CEO, will remain at the head of the new entity.

The merger aims to strengthen the dairy market position by increasing product diversity and market reach to help cope with the predicted decline in milk production in Europe. Ingo Müller, CEO of DMK Group, will join Arla’s board of directors upon completion of the transaction. The merger is currently expected to receive the necessary corporate approvals in June 2025, with finalisation planned for the end of the same year.

Europe

Austria has closed 23 smaller border crossings with Slovakia and Hungary to prevent the spread of foot and mouth disease (FMD). The decision was taken after outbreaks were detected in cattle in Hungary and Slovakia, where FMD had not been present for more than 50 years. The Austrian authorities have also banned the import of live animals, fresh meat and dairy products from these countries.

In response to the threat, the UK has banned imports of animal products from Austria, Hungary and Slovakia. Dr Christine Middlemiss, the UK’s chief veterinary officer, appealed for extra vigilance over the risk of the disease entering the British Isles.

Foot-and-mouth disease is a highly contagious disease of cloven-hoofed animals, posing a serious threat to the agricultural sector. Preventive measures have also been taken in Poland, including a ban on the import of animals and products from affected areas and tighter border controls.