Weekly dairy trends. Butter falls, WPI rises like never before [291st Edition Foodcom DAIRY Newsletter]

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The end of November saw a clear worsening of the pressure on the dairy market. The declines in liquid components have been felt most strongly – cream, raw milk and concentrates have all fallen sharply, with a direct impact on calculations in powders, fats and cheese. At the same time, the dairy protein segment is maintaining an exceptionally strong upward trend, with the prices of high-end concentrates and isolates at their highest levels for many months.

Declining momentum in liquids and continued high milk production determine the current sentiment, and the market enters the Christmas-New Year period with growing uncertainty about the management of surpluses. Against this backdrop, powders and cheeses remain relatively stable, although pressure from raw material is becoming more evident.

Milk powders

The market for skimmed milk powder remains strongly supply-driven. SMP food is stabilising in the widely observed range of 2 000-2050 EUR/MT, but it is worth noting that most sellers are clearly signalling greater availability of the commodity for December and January. This fits in with the sharp fall in SMC prices and higher activity from dryers, especially older ones that have returned to full production volumes.

SMP feed is also trading steady at around 2000 EUR/MT, but demand remains cautious. Current discussions indicate that buyers are not feeling buying pressure, expecting further market easing as end-year supply increases.

Skimmed milk concentrate has become one of the strongest falling protein components in recent days. Levels of 1100-1300 EUR/MT are the norm today, with prices going below 1000 EUR/MT in places for the festive period. This is a clear signal that the pressure on powders could also continue into early 2026.

The WMP segment remains weaker and continues to react to the situation in fats. The weaker condition of butter limits the potential for upward movement and current buying activity remains moderate.

Cheese

The cheese market remains in a fairly stable pattern. Good spot demand, particularly for Gouda and Mozzarella, is allowing prices to remain relatively strong despite apparent raw material cost pressures. In the case of Gouda, delivery dates of 3-4 weeks suggest that the market is still in a running mode, with no major surpluses.

However, the risk of a weakening in demand after mid-December, when pre-Christmas purchases end and some of the production heading into the New Year period is already contracted, is increasingly being signalled. If spot volumes weaken, a gradual move away from current price ranges is possible.

Mozzarella remains stable, but industry sentiment is more cautious than just a few weeks ago. Cheddar, on the other hand, maintains an even balance, and we are not seeing significant inventory levels, limiting downward pressure for the coming weeks.

Fats

Dairy fats continue to be one of the most challenging segments of the market. Butter contract prices are priced in the region of 4150 EUR/MT for the nearer term and around EUR 4300/MT for the following quarters. The spot market is experiencing increasing pressure from high production and weakened purchasing activity.

The high availability of fat across Europe, supported by an influx of imported raw material, leaves no room for price increases in the short term. Market participants are focusing on securing volumes at lower levels rather than attempting to raise prices.

At the same time, weak cream prices are increasing the amount of fat diverted to butter production, exacerbating supply pressures. As a result, the coming weeks may remain challenging, with the market signalling that ‘front four’ levels may remain the norm for longer.

Liquids

The past week has seen exceptionally sharp falls in the liquid components market. Cream has fallen to 4600-4800 EUR/MT, with prices offered for the Christmas/New Year period going down to around 4000 EUR/MT in places, indicating real difficulties in managing surplus raw material.

SMC is seeing a similar trend. The market is moving to 1100-1300 EUR/MT, with end-of-year transactions showing levels below EUR 1000/MT. Abundant raw material availability and low spot milk prices are exacerbating the pressure across the segment.

The exception remains protein concentrate, which maintains very high levels of 800-900 EUR/MT. This is a direct result of record prices for WPC 80 and WPI, which are causing processors to make maximum use of every available source of whey protein.

Whey powder

The whey market remains one of the most stable segments. SWP food and feed prices remain largely unchanged and moderate demand is not generating significant price volatility. The lack of supply pressure from the US, despite the limited production of dry whey, favours stability.

However, the part of the market related to high milk proteins is behaving very differently. WPC 80 maintains a very high upward momentum. The limited availability of raw material and the high demand from the functional food industry are pushing prices up further. The market is also signalling a major availability problem for the first months of 2026.

WPI remains one of the most expensive dairy components, with prices exceeding 21500 EUR/MT. Availability is very limited and producers have little scope to increase production, keeping the market in a state of perpetual tension.

What’s new?

Oceania

New Zealand’s grain sector is undergoing a significant strategic shift as farmers are increasingly moving away from traditional grain production to supply feed for the country’s lucrative dairy industry. Driven by the strong demand and financial stability associated with dairying, farmers are concluding that producing high quality feed provides more predictable and attractive returns than cereal exports alone. This shift, now evident across the grain sector as a whole rather than in individual cases, is transforming the local agricultural economy and signals a broader realignment of New Zealand’s agricultural priorities to support its globally competitive dairy powerhouse.

Asia

India’s traditionally protected dairy market is now facing unprecedented pressure to open up to global competition, as international trading partners pressure New Delhi to lower tariffs and ease long-standing import restrictions. This change could open up one of the largest consumer bases in the world to global dairy exporters, radically changing international supply chains. But for India’s millions of small-scale dairy farmers, the prospect is far more worrying: cheaper imported milk and dairy products could undercut local prices and destabilise a sector that is deeply linked to rural livelihoods. If the government decides to relax protections, India may soon experience a major restructuring of the domestic dairy industry, which will also be felt by the global dairy market.