The dairy revolution: what lies ahead in 2025? [252nd Edition of the DAIRY Newsletter]

Welcome Partners!

Welcome back to our newsletter!

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

Milk powder

The skimmed milk powder (SMP) market remains stable. Prices for fresh food SMP remain at 2550-2600 EUR/MT, with offers of German origin reported in the 2350-2400 EUR/MT range. The feed SMP market for the first quarter is also stable, with prices at 2450 EUR/MT DAP NL. Traders report quiet activity this week. Skimmed milk concentrate of German origin is priced at around 1900 EUR/MT FCA DE, while products of other origins reach prices close to 2100 EUR/MT FCA.

The outlook for the SMP market is mixed. Although demand in Europe remains moderate, export restrictions related to the foot-and-mouth disease (FMD) outbreak may reduce exports in the coming months, which could affect the market.

Cheese

In January 2025, the European cheese market shows clear price stability, although differences between categories are evident. Producers of ripened cheeses such as Gouda and Cheddar are maintaining high prices thanks to strong domestic demand and stable exports to EU countries. Gouda prices are hovering around 4300 EUR/MT, while cheddar remains in the 4400-4600 EUR/MT range. Mozzarella, the most important product of the catering sector, is priced slightly lower, at around 4000 EUR/MT, due to a seasonal increase in milk supply.

Forecasts for February show price increases in key cheese categories. Cheddar is forecast to reach 4600-4800 EUR/MT, reflecting strong demand and limited supply growth. Gouda prices are expected to rise to 4400-4500 EUR/MT, supported by stable export activity and steady domestic consumption. Similarly, Mozzarella is expected to increase to 4200 EUR/MT, supported by continued demand in the catering sector and seasonal changes in milk allocation.

Emmental remains one of the most expensive cheeses on the market, with prices exceeding 5000 EUR/MT. Demand is outstripping supply, especially in Western Europe, where consumption of this cheese is highest. Cagliata, used mainly in the processing industry, maintains stable prices with moderate demand, mainly in the domestic market.

Fats

Butter prices in Europe have exceeded 7500-7800 EUR/MT, reflecting strong demand and limited supply in the market. Exports remain a key factor supporting high price levels, although rising operating costs are challenging producers. Forecasts for the coming months suggest that prices will remain high, with potential limits to further increases due to cautious consumer demand.

The anhydrous milk fat (AMF) market remains stable, with prices in the 9200-9400 EUR/MT range, driven by strong export demand, particularly from the confectionery sector. Although rising production costs are affecting producer margins, demand for AMF remains stable. Prices are expected to remain at current levels in the near term, supported by strong interest in international markets.

Liquids

In January 2025, the European cream market saw a sharp increase in prices, which are now above 9000 EUR/MT. This increase is being driven by strong demand in both domestic and export markets, particularly in the confectionery and foodservice sectors. Despite the seasonal increase in milk production, the available supply of cream remains insufficient to fully meet market demand, which maintains upward pressure on prices. Producers anticipate that demand will remain high in the coming weeks and that supply will not increase significantly.

Concentrated skimmed milk (SMC) prices in Europe are stable, with products of German origin priced at around 1900 EUR/MT FCA DE, while other origins trade closer to 2100 EUR/MT. The SMC market remains balanced, with continued demand from processors and exporters. Limited supply availability, coupled with logistical challenges in some regions, prevents significant price declines. Vendors report continued interest in securing supply for the first quarter, suggesting that price stability will continue in the near term.

The raw milk market in Europe is showing price differentiation this week, with prices ranging from 560 – 600 EUR/MT depending on the region. Demand for raw milk remains high as processors seek to replenish stocks after the festive season. However, concerns over production levels in key regions, linked to recent adverse weather conditions, may limit any significant increase in availability. Short-term forecasts point to stability in milk prices, with the possibility of small increases if demand from processors picks up.

Whey powder

Sweet whey concentrate (SWC) prices in Germany have fallen to 500-600 EUR/MT FCA DE due to export restrictions on WPC products. Strong demand for cheeses, particularly Gouda and Cheddar, may affect the supply of whey products such as SWC and WPC. Meanwhile, feed SWP prices remain stable at 940 EUR/MT DAP NL, supported by steady domestic demand but limited production.

The global whey protein isolate (WPI) market has reached unprecedented price levels, with European prices exceeding 20 000 EUR/MT. This surge is due to strong demand combined with extremely limited supply, particularly in the sports and health sectors. The market has shifted to a production-on-demand model, with minimal spot availability. European buyers have largely secured their volumes for the first and even second quarter directly from producers, leaving traders with minimal options.

Forecasts point to continued high prices for whey products, although conditions in the European export market may affect dynamics in the coming months.

What else?

Europe

German veterinary authorities breathed a sigh of relief after tests on a goat farm near Berlin ruled out the presence of foot-and-mouth disease (FMD) virus. The suspicion arose after blisters were detected in the goats’ mouths, which could have suggested an infection. However, according to the Friedrich-Loeffler-Institut report, both the virus and antibodies against FMD were not detected in these animals.

It may be recalled that a week earlier, the first case of FMD in Germany in 37 years was confirmed at a farm in Hoppegarten, some 20 km east of Berlin, following the death of three water buffaloes infected with the virus. In response to the incident, authorities took immediate action, including culling the remaining 11 buffaloes on the farm and 170 pigs within a 1 km radius of the outbreak, to prevent further spread of the virus.

North America

Researchers at the Texas Biomedical Research Institute have discovered nine unique mutations of the H5N1 virus that increase its ability to replicate in humans compared to cattle. Furthermore, experiments on mice have shown that these genetic changes can lead to more severe infections, raising the level of epidemiological risk.

In the face of these findings, the researchers recommend tightening bio-assurance on dairy farms, including limiting visits to essential personnel, disinfecting equipment and monitoring animal health. Such measures are key to preventing potential outbreaks and safeguarding both livestock and public health.

Australia

The Kiama region of Australia, known for its milk production, is facing rising temperatures that exceed 40°C in summer. The Illawarra and Shoalhaven regions have seen a significant increase in average temperatures over the past two decades, and projections indicate that they could rise by a further 2°C by 2050 in high emissions scenarios.

Heat stress negatively affects cow health and milk production, but scientists offer hope. By identifying genes responsible for heat tolerance and genetic markers indicating traits such as a thinner coat and better body cooling, farmers can breed cows more resistant to extreme heat. Such innovations allow the dairy industry to adapt to a changing climate, securing the future of the region.