The whey protein market is booming – WPC80 and WPI shortages are driving up prices [260th Edition of DAIRY Newsletter]

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Welcome back to our newsletter!

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

Milk powder

SMP prices in Europe have fallen to 2400-2450 EUR/MT, driven by increasing availability of the product and limited export demand. The number of older batches on offer is also increasing, putting further pressure on prices. Deteriorating currency conditions (weakening USD) are weakening the competitiveness of European SMP on global markets, reducing importer interest.

In the feed sector, SMP is also cheapening, with prices for Q2 delivery in the NL DAP system falling below 2400 EUR/MT, with stable prices for skimmed milk concentrate (SMC) currently hovering around EUR 2100 EUR/MT.

WMP in Europe is holding steady at 4400 EUR/MT, supported by rising milk fat pricing. Rising butter prices are putting upward pressure on WMP prices. Demand remains decent and the limited availability of milk in the EU does not allow for a significant increase in production.

Cheese

Prices of both gouda and mozzarella cheese have increased in recent days. Their increasing value is due to intense market demand and limited supply of dairy raw materials. In addition, some buyers were forced to buy lots quickly for the second quarter, adding to the upward pressure on prices.

In contrast, prices for cheddar and emmental cheeses remain stable, but the market for these cheeses continues to show an upward trend, especially in the face of limited milk availability and continued high demand in Western Europe.

Fats

Butter prices in Europe have risen sharply in recent weeks and are now at 7430-7600 EUR/MT. The reason for this is the strong demand on the spot market, limited stocks and low supply of cream. Many players have been forced to make up for the missing volumes for March and April, resulting in buying pressure. Cream is being sold at almost 9000 EUR/MT – the highest this year.

The high prices for butter and cream are likely to continue, especially with low milk supply in the EU and the uncertainty surrounding foot-and-mouth disease in Hungary, which could further affect regional production.

Prices for anhydrous milk fat (AMF) in Europe have risen above 9000 EUR/MT, reflecting the upward trend of the entire milk fat complex. Strong international demand, particularly from Asian and Latin American markets, is driving this increase. The price premium for AMF reflects the continued reduction in cream supply and strong global interest in milk fat products. As a result, AMF continues to trade at historically high levels, with no immediate signs of relief on the supply side.

Liquids

Cream prices are reacting dynamically to the butter situation, with current prices in Germany and Poland reaching 9000 EUR/MT. With limited availability and high raw material costs, prices are likely to remain high, especially as EU milk production has still not increased significantly despite the start of the season.

Spot milk prices remain stable at high levels across Europe. While milk production is gradually increasing with the arrival of the spring flush, growth remains below expectations. This slower production, combined with strong demand, keeps supply tight and maintains upward pressure on raw milk prices.

Concentrated skimmed milk (SMC) prices in Europe have softened slightly, trading between 2050-2150 EUR/MT FCA Germany. Lower demand and recent wholesale offers from large sellers – particularly after production at some powder plants was halted – have added to the downward pressure. This fall in SMC prices is contributing to an overall reduction in SMP production costs, impacting the wider milk powder market. For second quarter deliveries in DAP NL, prices remain below 2400 EUR/MT.

Whey powder

Sweet whey powder (SWP) prices for food use in Europe remain stable at 1100 EUR/MT, supported by high input costs and limited availability of liquid whey. Strong WPC 80 and WPI production continues to absorb raw material, keeping the market stable despite weakening US prices. Q2 feed grade SWP prices are at 900-920 EUR/MT (DAP NL) and the European market is currently balanced, although pressure from falling US prices and currency changes may undermine export competitiveness.

WPC80 Instant prices rose again, reaching 11500 EUR/MT, driven by continued global demand and limited availability. Many producers have already sold the majority of Q2 volumes, while buyers are still looking for supply, fuelling tension in the market. Lower US production, down 7.5% year-on-year in January, is adding to global tension as producers focus on more profitable MIP. Prices are expected to rise further as the demand-supply gap widens.

WPI remains remarkably stable at 23000-23500 EUR/MT in Europe, with global demand far outstripping supply. Despite a 19.9% increase in US production, availability remains insufficient. China’s 10% import tariff on US MIP is likely to keep US product at a discount to European MIP, but with higher prices in the EU, the difference is due more to European strength than US weakness. The market outlook remains tight and no immediate improvement is expected.

News

Global

Global milk production in 2025 is expected to grow by only 0.8% in major export regions such as the EU, the US and New Zealand, according to Rabobank. The weak growth is due, among other things, to falling production in China and uncertainty in international trade and due to possible tariff changes in the US. Despite this, US cheese exports are breaking records and Australia is recording a slight increase in production and a good outlook for the future. The market remains dynamic and vulnerable to geopolitical changes.

Europe

Three months after the FMD outbreak was detected in Brandenburg, the World Organisation for Animal Health (WOAH) has officially recognised that Germany has regained its FMD-free status. The restrictions already only apply to a small zone around the original outbreak.

Agriculture Minister Cem Özdemir stressed that the WOAH decision is a key step towards lifting export bans on German meat and dairy products. However, rebuilding exports could be a challenge, as some countries, such as South Korea and the UK, may require additional waiting periods before reopening their markets to German products.

Europe

Ukrainian milk production is expected to fall by as much as 1.5 million tonnes by 2033, from 7.4 to 5.9 million tonnes, despite an increase in cow yields from 5.7 to 6.4 tonnes per year. The decline is mainly due to a planned 31% reduction in herd size. The crisis is exacerbated by declining domestic demand (Ukraine has lost around 10 million inhabitants since the start of the war), delays in payments from retail chains and power supply problems, which are destabilising the industry.

North America

Trade relations between the European Union and the United States are once again coming into question due to new tariffs planned by the US on agri-food products. The US is the second largest market for EU exports of these products, reaching €228.6 billion in 2023, with a trade surplus of €70.1 billion.

The introduction of additional tariffs could significantly affect the competitiveness of European dairy products in the US market, leading to a decline in exports and potential losses for EU producers. In the face of these challenges, EU farm organisations need to develop a common strategy to minimise the negative impact and protect the interests of the European agri-food sector.