Markets are stabilizing at high levels amid mixed fundamentals across the dairy sector [300th Edition of the Foodcom DAIRY Newsletter]

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European dairy markets have entered a calmer phase following the sharp fluctuations seen earlier this month. Although price volatility has eased, most product categories continue to see high prices, driven by limited supply in certain segments and cautious buyer behavior.

Market liquidity remains uneven. In some markets, buyers are stepping back after securing their near-term needs, while in others, the lack of available offers continues to support prices. Confidence is rising slightly, but market participants remain highly selective, reassessing the value of individual products in the face of abundant milk supply and divergent fundamentals.

Milk powder

Skim milk powder markets are stable or slightly firmer in a very quiet trading environment. Food-grade SMP is trading at 2,450–2,550 EUR/MT FCA, with feed-grade prices similar. April and Q2 futures contracts are around 2,450–2,500 EUR/MT DAP, while FCA spot prices remain slightly lower, suggesting limited downside potential for now.

Despite ample milk supply and low skim milk powder prices, sellers are maintaining discipline. The market appears to be consolidating following recent volatility rather than preparing for another sharp move. Cheap skim milk powder from France is putting pressure on SMP prices, but this has not yet translated into significant downward pressure on SMP prices.

Whole milk powder remains less dynamic than SMP. European whole milk powder prices currently stand at around 3,300–3,400 EUR/MT FCA, which is broadly in line with recent levels. Demand remains selective, and production continues to be constrained as producers prioritize SMP and butter. As a result, whole milk powder prices appear relatively stable but lack the fundamental support seen in skim milk.

Overall, milk powder markets are consolidating, and upside potential is limited as long as milk inflows remain strong.

Cheese

Cheese markets continue to strengthen, with producers reporting higher price levels for most cheese types. Gouda, Edam, Mozzarella, and Cheddar are currently selling at 3,300 EUR/MT FCA or higher, with some expectations that prices may approach 3,400 EUR/MT in the near future; we are also seeing an increase in inquiries regarding Cagliata.

The anticipated January price correction never materialized, and buyers who delayed their purchases are now facing higher restocking costs. Availability of spot volumes remains limited, while producers appear content to maintain prices at current levels.

At the same time, resistance on the demand side is growing. Finding buyers willing to transact at these higher prices is becoming increasingly difficult, suggesting that further increases may depend on whether buyers decide to secure volumes for the second quarter or continue to buy on an as-needed basis.

Fats

Butter markets remain at high levels. Reports indicate transactions starting at 3,950 EUR/MT in Poland, and more frequently in the 4,000–4,200 EUR/MT range for butter originating from the Netherlands, Belgium, and Germany. There are reports of isolated transactions at 4,300 EUR/MT or higher, while German butter in 10-kg blocks costs around 4,500–4,600 EUR/MT.

Despite high prices, sentiment remains mixed. Butter prices continue to significantly exceed the cream-based parity, which would suggest a butter price closer to 3,250 EUR/MT. This discrepancy continues to raise doubts about the sustainability of the situation, even as buyers show a willingness to secure volumes to gain price certainty.

For now, butter prices appear to be supported, but the market remains sensitive to changes in demand and the situation in the liquid products market.

Liquids

This week, liquid markets weakened further. Cream prices fell to 3,700–3,900 EUR/MT FCA, declining alongside other liquid products despite stable butter markets.

Skim milk concentrate prices plummeted at the start of the week, reaching as low as 800 EUR/MT FCA, before stabilizing at around 900–1,100 EUR/MT FCA.

The weak market conditions for concentrates stem from an influx of cheap supplies from France, overlapping maintenance schedules at several plants, and temporary production disruptions that have disrupted the flow of goods.

Raw milk supply remains high, and spot prices continue to fall. Although milk prices paid to farmers appear to be stabilizing after recent declines, current price levels are still unlikely to significantly curb milk supply in the short term, keeping liquid markets well-supplied for now.

Whey and Proteins

Whey markets remain one of the most strained segments of the European dairy sector. Whey concentrate prices are extremely high, currently ranging around 900–1,000 EUR/MT, and at times even exceeding skim milk concentrate prices. This reflects strong demand combined with limited raw material availability.

Prices for sweet whey powder remain stable, with food-grade SWP priced at around 1,200 EUR/MT and feed-grade material at nearly 1,100 EUR/MT. Market support continues to stem from high whey concentrate prices and limited supply.

Prices in the whey protein market remain at historically high levels. The price of WPC 35 is currently around 2,800 EUR/MT, and the high-protein segment remains exceptionally tight. The price of WPC 80 (instant) is reportedly between 16,000 and 16,500 EUR/MT, driven by strong demand from the food markets and very limited availability on the spot market.

WPI prices remain high and stable at around 24,000–24,500 EUR/MT, with most production volumes already sold under forward contracts. Limited processing capacity continues to constrain supply, keeping whey proteins largely insulated from the volatility seen in the fats and milk powder markets.

What else?

Europe

A new EU-funded research initiative is exploring how Europe can reduce the environmental footprint of livestock feed by transitioning to more sustainable alternatives. This multi-year project focuses on options such as diversified pastures with legumes and herbs, greater use of byproducts from the agri-food sector, and alternative protein sources, assessing their impact on animal health, productivity, feed efficiency, and overall sustainability. By combining on-farm trials, scientific research, and life-cycle assessments, the initiative aims to reduce dependence on imported feed proteins and strengthen the resilience and sustainability of the European livestock supply chain.

Globally

A new analysis of the 2025 DSM-Firmenich Global Mycotoxin Survey highlights that mycotoxin contamination in feed ingredients and finished feeds remains high worldwide, posing an ongoing challenge for feed manufacturers and livestock producers. The report found that many mycotoxins remain prevalent in samples—with Fusarium-related toxins dominating globally, and their prevalence is particularly high in corn and corn silage in many regions—which underscores the ongoing need for rigorous monitoring, region-specific risk management, and integrated risk mitigation strategies in feed safety programs.