The European dairy market under pressure from rising milk supply [Edition 304 of the Foodcom DAIRY Newsletter]

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European dairy markets are entering the second quarter in a weaker mood, as growing milk availability and reduced export competitiveness are beginning to put pressure on prices in many segments. While proteins remain strong, most other categories are showing signs of weakness under the influence of rising supply.

The market is becoming increasingly unbalanced with the onset of seasonal increases in milk production, forcing sellers to be more active, while buyers are adopting a more cautious and wait-and-see approach.

Milk powder

The skim milk powder market is beginning to show signs of weakness after a period of relative stability. Prices have fallen slightly, particularly in the food segment, where trading levels have approached 2,650 EUR/MT. Previous supply tensions are gradually easing thanks to high production resulting from ample milk availability.

The feed segment is moving similarly to the food segment, with only slight price differences. Demand remains present but is not aggressive, and buyers are building forward positions with increasing caution.

Whole milk powder is also under slight pressure due to improved availability in Europe and weaker global sentiment. The market is not showing any sharp corrections, but there are no clear growth drivers.

Cheese

The cheese market is beginning to turn, and the second quarter is opening significantly weaker than the strong first quarter. Higher production and lower export competitiveness are shifting the market balance, forcing some sellers to sell more aggressively.

Gouda prices are under pressure and are currently hovering around 3,500 EUR/MT. Buyers are limiting their purchases in anticipation of further price declines.

Mozzarella has also become cheaper, with European prices at around 3,450–3,500 EUR/MT. High production has increased selling pressure amid weaker export demand.

Cheddar remains relatively stable, but with noticeably weaker sentiment. Seasonal production in Europe and competitive prices from the U.S. are limiting upside potential.

After a brief rebound,Emmental came under pressure again as buyers began to opt for cheaper alternatives.

Fats

The butter market remains relatively stable, though sentiment remains cautious. Cream availability remains high due to increased milk supply and pressure on processing capacity.

Buyers are well-stocked in the short term and show little urgency to buy, which keeps prices in a sideways trend.

Liquids

The liquid products market remains under pressure from high milk supply. Cream prices fell at the start of the week but later rebounded.

Spot milk prices remain at very low levels, reflecting the continuing imbalance between supply and processing capacity.

Skim milk concentrate has become more expensive compared to previous weeks, and prices around 1,000 EUR/MT are increasingly being discussed.

Whey and proteins

The whey market is sending mixed signals. Prices in the feed segment have fallen slightly, but overall levels remain relatively strong due to limited drying capacity and stable demand.

Whey concentrates remain volatile in price, and production continues to focus on more profitable products such as WPC80 and WPI.

The protein segment remains the strongest part of the market. WPC80 prices are holding near or above 20,000 EUR/MT, and WPI exceeds 25,000 EUR/MT. Demand continues to outstrip supply.