Dairy Market: Downturn? Newsletter – 13 April 2026
“A wise cheesemaker does not plan for the flood – he plans for the whole summer.”
(From the diary of our Antoine the cheese artist.)
Review & Outlook
Downtrend or expected post‑Easter dip?
Milk deliveries in Germany and France have declined slightly for the first time after six months of continuous growth, suggesting that the seasonal peak has been reached or is at least close. However, markets are not yet pricing in a recovery: geopolitical instability and persistently high milk flows – reinforced by new record volumes in the United States – continue to weigh on sentiment, even though the strong USD improves the relative competitiveness of European products.
In Switzerland, milk oversupply dominates the agenda of several dairy organisations’ general assemblies in April. A sober historical perspective is warranted: supply situations like the current one occur only every 10 to 20 years. Designing political measures or investment decisions in processing capacity based on such an exceptional volume situation would be strategically misguided.
Milk Supply
- Germany: –0.3% WoW (+6.2% YoY)
- France: –0.5% WoW (+3.4% YoY)
Milk Powders
Milk powders weakened broadly in week 15, with geopolitical uncertainty weighing on sentiment, while EU-origin products gained competitiveness versus US origin. In contrast, the whey complex continues to strengthen, supported by strong demand for WPC/WPI, which limits availability for standard whey powders.
Cheese
Cheddar curd declined to €3,490 (–2.1% WoW) and mild to €3,515 (–1.4% WoW), partly due to increased market participation by Irish suppliers. Emmentaler recorded the sharpest drop at –3.6% WoW to €3,725, while overall market sentiment remains cautious, with buyers covering short term and avoiding longer-term contracts. By contrast, semi-hard cheeses remain resilient, with good demand and tight inventories.
Liquid Commodities
Demand for liquid products for drying remains robust, with skim milk and whey concentrates firming. Raw milk, however, faces limited outlets due to fully utilised processing capacity, keeping spot prices – especially for skim milk – under pressure.
Milkfat
Butter prices are moving sideways, constrained by high inventories and unattractive storage economics, while Q2 demand remains weak and a recovery is expected only in Q3 as milk volumes decline. Cream, by contrast, shows relative strength, supported by seasonally improving demand from the fresh segment.
Energy
Short-lived optimism following the US–Iran ceasefire (from 8 April) faded quickly. Brent crude fell from USD 109.27 to USD 94.75 per barrel but has already rebounded to USD 98.47, as the Strait of Hormuz remains closed and Iran demands control over transit as a condition for lasting peace. Gasoil stands at €183.73/100 litres and natural gas (TTF) at €45.82/MWh (vs. €31.51 at end-February), increasing transport costs in dairy trade and leaving European gas storage at just 5.4% heading into summer.
Global Dairy Trade – Event 401
After six consecutive increases, Event 401 delivered a broad correction: the overall index fell by 3.4%, with all major products lower. Butter (–8.1%) and AMF (–7.1%) recorded the sharpest declines, while WMP (–0.7%) and SMP (–1.6%) eased more moderately. New Zealand offered volumes were reduced by over 18% (WMP –26%), yet futures markets reacted further negatively after the auction; the current season now stands around 2.8% below the 2024/25 average.
USA: Milk Supply & Production (Jan–Feb 2026)
- Milk production: 17.28 million tonnes, +3.2% YoY
- Cheese production: 1.105 million tonnes, +4.2%
- Cheddar +4.7%, Mozzarella +5.2%
- Butter production: 209.6 thousand tonnes, +9.8%
- Skim milk powder: +5.3%, ending a multi-year decline
- Whey products: Whey powder +9.7%, WPI +11.8%, WPC +5.2%, Lactose +2.1%
USA: Key Trade Figures (Jan–Feb 2026)
- Exports:
- Butter: 31.0 kt, +80.3% (Canada 22.9%, Mexico 16.5%)
- Cheese: 110.1 kt, +20.2% (Mexico ~33%, South Korea 11%, Japan 8.5%)
- SMP: 108.1 kt, +13.5% (54.2% to Mexico; mixed performance in Asia)
- Total dairy exports: 90.1 kt, +9.3% (China 43.2%, Canada 12.6%, Mexico 8.7%)
- Imports:
- Cheese: 24.3 kt, –27.9% (69.8% from EU-27)
- Butter: –42.3% YoY, sharp decline from Ireland
- Casein: 8.5 kt, –10.2%
Switzerland
In April, Swiss Milk Producers (SMP) published their 2025 annual report. The year was characterised by sharply rising milk volumes amid low international prices, resulting in an exceptional situation: Switzerland exported milkfat for the first time in years instead of importing it. As a countermeasure, the A reference price was reduced by CHF 0.04 to CHF 0.78, fixed until end-2026 – painful but understandable as a short-term stabilisation measure.
Politically, SMP is focusing on three levers: tighter control of processing traffic, protection of Swissness in the domestic market, and – critically – a CHF 0.05 increase in the cheese milk subsidy. These are the right measures, albeit long overdue. It has been clear for years that milk powder and fat disposal are not sustainable long-term models.
Swissmilk’s base marketing is showing results, with rising consumption of cheese (+4.5%) and quark (+14.9%). However, Swiss cheese can only be successfully marketed if the foundation of the quality promise remains intact: raw milk cheese from silage-free feeding.
Without this guarantee, marketing loses credibility. This is the key lever: the silage-free premium has stagnated at CHF 0.03 for years, while the share of silage-free milk has declined from 30.2% to 29.7% within one year. This erodes not only the premium segment but also credibility – and ultimately the reality behind the imagery.
No silage-free feeding means no raw milk; no raw milk means no premium; and without premium, there is no sustainable cheese market.
Recommendations
Geopolitical uncertainty is increasing price volatility. At current price levels, we do not recommend blanket hedging. Instead, selectively use the current dip to cover potential volume gaps in Q3.
Q2 2026 (use the current dip)
- Gouda / semi-hard cheeses: stable to firm
- Mozzarella: stable to firm
- Cagliata: stable to firm
- SMP: uncertainty weighs on the market
- Butter: volatile, biased lower (inventory pressure)
- Whey proteins: slightly firmer (WPC80 & WPI in strong demand)
- WMP: stable to firm; possible weakness in September
Q3 2026
- Generally stable, with potential seasonal weakness in September across products
Q4 2026
- No reliable forecast possible at this stage
Upside factors:
- Good demand
- Low inventories
- Strong demand for whey proteins
Risks:
- High cow numbers in New Zealand
- Potential USD weakness
- EU milk curve similar to 2025
- Historically declining prices from October onwards
Strategic Outlook – “Strategy beats opportunism”
Milk volumes may grow only modestly in 2026 and could decline again in 2027. Now is the ideal time to secure the supplier base long term to ensure supply reliability once production tightens.
Strategy beats opportunism – those who stabilise their supplier base today will be ahead in 2027.
Our Trade Fair Presence 2026
- Tutto Food Milano – 11–14 May 2026
- Salon du Fromage, Paris – 7–9 June 2026
- Summer Fancy Food – 28–30 June 2026
- SIAL Paris – 17–21 October 2026
- World Cheese Awards, Córdoba – 12 November 2026
- Marca Bologna – 13–14 January 2027
Treat yourself to a genuine Swiss raw‑milk flower meadow cheese not just a pleasure, but a small piece of joy for the soul.
Warm regards, Affineur Walo
This forecast is based on our market knowledge. It does not constitute a definitive prediction, and we accept no liability should it prove incorrect.
