Dairy Market: Inflection Point Newsletter of 4 May 2026
He who stands on the summit should always think of the descent. (From the notebook of Antoine, the Cheese Artist, Gruyères, around 1680)
Review & Outlook
The milk peak is approaching or has already been reached. Processing capacity is currently insufficient to absorb the available volumes in full – liquid markets are under pressure as a result. In milk fats, particularly butter, stocks are well filled and prices remain weak.
By contrast, whey proteins are at all-time highs and are pulling SMP along with them. The high-protein trend, however, is not yet fully reaching the cheese market: standardised varieties remain under price pressure. Flower meadow cheese from raw milk and functional cheeses are stabilising the overall picture and providing positive momentum.
With butter at a new low for 2026, securing an initial tranche for Q4 may make sense.
Milk Deliveries,
Week 16 – volume growth slowing:
- germany: +0.5 % week-on-week, +5.5 % year-on-year
- France: –1.4 % week-on-week, –0.3 % year-on-year, the first time below prior-year level since June 2025
March 2026:
- Poland: +3.2 % year-on-year, Q1 +3.4 %
- USA: +2.3 %; Q1 +2.9 %, growth slowing
Cheese
Flower meadow cheese (raw milk / premium): Prices largely stable to slightly weaker. Emmentaler with sharper corrections, other specialties holding up – clearly more resilient than the volume segments.
Standardised pasteurised cheeses: Continued pressure. Edamer and Gouda declining for the sixth consecutive week, driven by ample milk availability and weak demand. Monthly losses of 6–7 % confirm the structural weakness.
Decanter / volume cheese: Structurally weak, unchanged. Price and demand trends remain subdued; volume clearly takes precedence over value creation – no floor in sight.
Hi-Lo cheese (high protein / low fat): Mixed picture. Protein-based mass applications remain under pressure, while functional applications are stabilising. Cagliata is gaining ground, as is Cheddar – pointing to seasonal demand and clear application advantages.
Milk Powders
SMP firm, WMP weaker: SMP Feed +4.6 % WoW, SMP Food +2.3 %, WMP –0.3 %, weighed down by soft milk fat. Despite higher prices, demand remains subdued, with international buyers acting cautiously.
Proteins: The market remains clearly WPC80-driven, with further upside potential against tight processing capacity. The shortage is shifting value creation into whey upgrading: standard whey powder at €1,900–2,000/t, US product becoming competitive. Relief will only come with significantly expanded drying capacity.
Liquid and Fat Markets
Raw milk under pressure, concentrates firmer. Skimmed milk and whey concentrates are gaining, supported by stronger demand from Southern Europe (tourism season) and active sourcing by powder plants. Processing capacity remains fully utilised.
Milk fat remains weak: cream falling more sharply than butter, with surpluses partly flowing into Eastern Europe. Despite low prices, buyers remain cautious in view of high stock levels and volumes. Outlook: seasonally rising demand should lift cream back above butter. AMF stable at €4,850/t, market quiet.
German Dairy Industry
Consultancy Roland Berger expects persistently high volatility. I see rather a calming after the Covid super-cycle. The underlying direction, however, is undisputed: global consumption is growing, production is barely keeping pace – competition for the resource of milk is intensifying.
The decisive question will be who, thanks to high value creation, can sustainably pay the best milk prices. For milk producers, this means looking more carefully at whether their buyer is strategically positioned or primarily acting as a surplus processor. For trade and industry, the choice of the right partners becomes a key question.
Swiss Cheese Exports March 2026
Despite declines in the USA, Switzerland is once again a net exporter: exports +10.2 % to 20,699 t, imports +4.2 % to 20,438 t. Shipments to Europe rose by +12.5 % (Germany +5.9 %, Italy +34.7 %), while the USA stood at –4.5 %.
- Classic AOP cheeses remain under pressure, above all Emmentaler Switzerland.
- Non-AOP cheeses including Raclette, marketed under the brands of affineurs and producers, are showing positive momentum again after the setback in 2025. The share of flower meadow cheese from raw milk is not separately reported in the statistics; based on our own data, we assume growing market shares.
- Hi-Lo is growing most dynamically, driven by the high milk surplus.
Recommendations
Unchanged: geopolitics is increasing volatility – no general hedging at current levels. Use the current dip selectively to close volume gaps in Q2/Q3, particularly in cheese.
Q2 2026 – use the dip:
- Gouda / semi-hard cheese: stable to rising
- Mozzarella: stable to rising
- Cagliata: stable to rising
- SMP: uncertainty weighing on the market
- Butter: volatile, rather weak (stocks)
- Whey proteins: sideways (WPC80/WPI in strong demand)
- WMP: stable to rising, September weakness possible
Q3 2026 – seasonally calm:
- Gouda / semi-hard cheese: stable, September weakness possible
- Mozzarella: stable, September weakness possible
- Cagliata: stable, September weakness possible
- SMP: slightly firmer, September weakness possible
- Butter: volatile, rather weak
- Whey proteins: sideways, autumn / Christmas firmer possible
- WMP: stable, September weakness possible
Q4 2026: Forecast not currently possible.
Exception milk fat: new low for 2026 – partial hedging advisable.
Price drivers:
- Solid demand
- Low stocks
- Strong demand for whey proteins
Risks:
- High cow numbers in New Zealand
- Possible USD weakening
- EU milk curve similar to 2025
- Seasonal weakness from October onwards
Strategic Outlook – Strategy Beats Opportunism
European milk volumes are likely to grow only moderately in 2026; a trend reversal in 2027 cannot be ruled out. Those acting opportunistically today risk falling short on supply tomorrow.
A stable supplier base is not an option but a strategic necessity.
Strategy beats opportunism – those who secure the right partners today will be able to deliver in 2027, when others are still searching.
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.
