Stabilisation or chaos? The latest trends in the cheese and dairy fat market [246th Edition of the DAIRY Newsletter]

Welcome Partners!

Welcome back to our newsletter!

We have analysed the key developments in the dairy market: from rising milk powder prices, to stabilisation in the cheese market, to the changing dynamics of butter and whey prices. Get ready for detailed data, forecasts and insights into how global trends may affect the European and global markets.

Let’s see what has happened in the dairy market recently!

Milk powder

Skimmed Milk Powder (SMP) for food use has seen a steady increase in price, currently in the range of 2600-2650 EUR/MT. Futures prices for Q1 are 2750-2775 EUR/MT, reflecting optimism about expected demand in the coming quarter. Nevertheless, the availability of SMP in the market remains stable, with a slight increase in export interest to non-European regions, especially Asia, which may affect supply and prices in the future.

Global demand for milk powder was quite low in recent times, contributing to a decline in production and a shift of resources to other, more profitable products. We are now seeing an increase in demand, particularly in China, which may lead to a need to replenish stocks. However, changes in consumption are slow, so price increases may be short-lived and long-term stability remains uncertain.

Cheese

The market for Cheeses such as Gouda and Edam remains stable, although some tension is evident with anticipated price falls. Demand for Cagliata cheese remains stable and Mozzarella prices, which had been falling over the past two weeks, have now stabilised. Cheese exports to Asia, especially China, are increasing, which may affect long-term price stability in Europe. Cheese production may be reduced in favour of other products, potentially pushing up cheese prices in the future.

Fats

Prices for Lactic Butter have fallen to 7400-7600 EUR/MT, with further trading in Q1 at 7300 EUR/MT and forecast to fall below 7000 EUR/MT in Q2. Butter production remains limited due to the low availability of cream, with prices as high as 11000 EUR/MT. Producers prefer to sell cream, which further limits butter availability. We are also seeing limited availability of Sweet Extra Butter in Central Europe, which is currently priced at over 8200 EUR/MT, while the previous week the price was over 8400 EUR/MT. In Oceania, butter prices remain high and low stock levels in Europe are further reinforcing the pressure on prices in the short term.

Anhydrous Milk Fat (AMF) prices remained stable, falling within the 9900-11000 EUR/MT range. The market has stabilised after recent price declines and future price movements will depend on raw material availability and demand. New EU regulations, imposing stricter production standards and CO2 requirements, may reduce AMF availability and increase production costs. Government support for small and medium-sized processors may mitigate the impact of these changes.

Fluids

Cream prices remain stable at 10750-10900 EUR/MT. We are currently seeing stable availability of the product, but seasonal changes are expected which may affect price levels in the coming weeks. Processors continue to monitor the situation intensively to adjust production in line with future demand forecasts. Seasonal changes, such as the approaching cold months, may reduce cream production, which will affect availability and prices later in the season. In some regions, cream prices in Europe have reached as high as 11000 EUR/MT due to limited milk purchases and strong demand.

Skimmed Milk Concentrate (SMC) is currently in the 2300-2350 EUR/MT range, FCA Germany. The availability of the product is starting to increase, which could influence further price movements.

Milk spot prices remain stable above EUR 60 per 100 kg, with delivery prices in southern Germany fluctuating between EUR 67-69 per 100 kg. Milk yields remain stable, suggesting a balanced market, with continued competition between processors for raw material availability. Moderate weather conditions in recent months have favoured stability in milk production, although meteorological forecasts for the coming quarter are uncertain, which may affect raw material availability and prices in the future.

Whey powder

Sweet Whey Powder (SWP) prices for consumption remain stable at 870-900 EUR/MT, FCA Germany. The feed version of SWP remains stable, with prices in the range of 920-930 EUR/MT in both Q4 and Q1. SWP production in Europe and the US has declined, contributing to limited availability and continued high price levels.

Products such as Whey Protein Concentrates (WPC) and Whey Protein Isolates (WPI) saw an increase in production, driven by growing demand for high-protein products such as sports nutrition and protein drinks. Despite increased production, SWP availability remains limited and prices remain high due to low supply and stable liquid whey prices supporting the market.

What else ?

Connecting with Japan – Foodcom S.A. launches dedicated website

Foodcom S.A. is entering the Japanese market with an unwavering determination and commitment to innovation. Our newly launched dedicated Japanese landing page sets a new benchmark in the industry, facilitating seamless connections between us and customers who demand excellence and reliability. By breaking down barriers and building strategic partnerships, we are redefining standards and creating value in one of the world’s most dynamic markets.

Click here to explore our new landing page! The future of the industry is here – be a part of it today!

Europe

French farmers have blocked access to the port of Bordeaux in protest against the difficult economic conditions and rising production costs. The farmers, represented by trade unions, point out that their incomes are under severe pressure due to falling farmgate prices and rising energy and fertiliser costs.

The action to blockade the port aims to draw the attention of the authorities to the crisis facing French agriculture. The farmers are demanding that the government take immediate action to alleviate their plight, including better protection from cheap agricultural imports and financial support to help them remain competitive in the European market.

Global

Dairies around the world are stepping up their efforts to reduce emissions and better manage water resources. Faced with increasing social and regulatory pressures, dairy companies in various countries are increasingly investing in technologies to minimise their environmental impact.

A key priority is to reduce greenhouse gas emissions, such as methane, and to manage water efficiently, which is crucial in the face of dwindling global water resources. Industry representatives stress that pursuing sustainability will both help the environment and improve the long-term sustainability of the global dairy sector.