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Dairy Market: Turning Point? Newsletter dated 26-1-26

Sat, 01/24/2026 - 17:05

Dairy Market Analysis from 26-1-26 Milchmarkt Marktanalyse vom 26-1-26-4-25

Dairy Market Analysis from 26-1-26 Milchmarkt Marktanalyse vom 26-1-26

Review and Analysis
The markets are entering a phase of normalization: moderate volume growth, stable demand, and slightly positive international price impulses.

Milk Production: First Braking Marks Visible
In the last calendar week, milk production in France decreased by –3.4% compared to the previous week. Growth in Germany is also slowing significantly: only +0.2% compared to the previous week, after strong increases in November and January. This development could indicate that the 2026 milk peak will be reached earlier than expected. Accordingly, the market is likely to stabilize gradually.

Further Developments at a Glance:

EU-27: +5.2% (Nov. 2025 vs. PY)
Netherlands: +6.8% (Dec. 2025 vs. PY)
Austria: +9.8% (Nov. 2025 vs. PY)
Poland: +5.9% (Nov. 2025 vs. PY)
UK: +6.2% (Nov. 2025 vs. PY)
USA: +4.5% (Nov. 2025 vs. PY)
New Zealand: +2.5% (Dec. 2025 vs. PY) – highest level since 2018
Argentina: +4.9% (Dec. 2025 vs. PY), annual increase +10.1%
Ireland: –2.3% (Nov. 2025 vs. PY)

GDT Result 21-1-26
+1.5% to USD 3,615 per tonne. The upward trend is moderately continuing.

It was striking that New Zealand products achieved the highest prices. The February contract in particular showed the strongest increases. The market sentiment is cautiously optimistic.

Results per Category

AMF +3%; Butter +2.1%
SMP: +2.2% (USD 2,615/t), WMP +1%
Cheddar decreased by -1.4%, Mozzarella -2.3%

🇨🇭 Switzerland
While international markets are gradually stabilizing, a familiar pattern is emerging in Switzerland: the highly regulated market reacts with a delay, which intensifies swings and prolongs adjustment phases. Milk volume remains high, but recent declines in France and slowed growth in Germany suggest that the European milk peak could be reached earlier than expected. This is slowly taking pressure off the system in Switzerland as well.

With stagnating or declining milk deliveries in neighboring countries, processing capacities are becoming available there. This relief helps to manage the high volumes in Switzerland. The additional volumes flow primarily into SMP and butter, while cheese stocks continue to be managed with great discipline.

In my assessment, it will take another 12–18 months for the market to find a market-compliant balance again. But that's exactly when the decisive phase begins: the structural reorganization of the Swiss milk landscape.

The pressure on margins is becoming a selection factor. Companies with financial burdens will have to find new solutions. Others who try to leave or redefine their traditional role will have to hold their own in a demanding environment. The coming months will show who is consolidating their position and who has strategically miscalculated. Today, the milk price paid already clearly signals who counts among the strategic winners and who should consider a change of direction.

Forecasts

Q1 2026

Gouda / Semi-hard cheese → stable to slightly firmer
Mozzarella → stable to slightly firmer
Cagliata → stable to slightly firmer
SMP → firmer to moderately increasing
Butter → weak, high stocks and production
Whey proteins (WPC80) → firm, partly further increasing
WMP → stable, hardly any movement

Q2 2026

Gouda / Semi-hard cheese → sideways to slightly weaker
Mozzarella → stable, possibly slightly weaker
Cagliata → sideways, slight downward risk
SMP → stable to slightly firmer
Butter → sideways
Whey proteins → stable, slightly firmer
WMP → sideways

Recommendation
Close Q1 2026 contracts, except for butter. For Q2 2026, remain flexible.

Strategic Outlook: " You reap what you sow "
Milk volumes, growth is flattening; now is the moment to secure your supplier base for 2027–2028.

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