Newsletter

Dairy Market Update: Are the markets in balance? Newsletter: 6 June 2025

Thu, 06/05/2025 - 13:20

Dairy Market Analysis from 6-6-25; Milchmarkt Marktanalyse vom 6-6-25

Prices remain stable for now.

Milk fat (+2.0%) and spot milk (+1.0%) have continued to rise slightly. Cheese and milk powder remain largely steady, while casein is steadily losing value – likely due to the growing production of analogue cheese.

Dairy Market Analysis from 6-6-25; Milchmarkt Marktanalyse vom 6-6-25-4-25

Market Developments: Review and Outlook

There is no clear trend – yet:

Milk fat remains scarce; cheese prices could rise significantly in Q3.
Cheap US cheddar continues to weigh on export prices.

Global markets are being heavily influenced by the trade conflict between the US and China. Should tariffs be imposed on US products, Europe would likely benefit – especially for whey proteins and lactose.

Sentiment: nervous, but (still) not panicked – markets are searching for direction.

Germany & France: Milk Collection Declining

Germany: Peak milk supply was reached unusually early this year (mid-May). Week 21: –0.3% vs previous week, –1.8% vs previous year.
France: +0.5% vs previous year.

GDT Auction – 3 June 2025: Weak Momentum

Total Index: –1.6% to 1,311 points
Average price: €3,794/tonne
Sixth negative movement in the last twelve auctions

Switzerland: Concerning Cheese Sales Figures

Total exports are stable – but excluding the increase in industrial cheese, exports dropped by 725 tonnes (–3%) by the end of April.

Biggest declines:

Le Gruyère: –11% (EU and USA affected)
Switzerland Swiss: –15% (mainly due to US tariffs)
Raclette: –16% (EU and USA affected)
Industrial cheese sales rose by +14%

Are markets in balance?

Only on the surface.

Milk fat remains tight – upward price pressure is likely.
Whey proteins and cheese prices are interlinked – and heavily dependent on the outcome of the China–US negotiations.

Those relying on the “Taco Theory” (“Trump always chickens out”) are hoping for a soft resolution to the trade dispute. I heard the Interprofession du Gruyere is following this theory.

Outlook for Q2 and Q3 2025

Q2 2025

Gouda: Secure supply now – prices stable with slight upward pressure
Mozzarella: Secure supply now
Cagliata: Secure supply now
Milk fat: Fix prices now – summer demand meets structural shortage
SMP (Skimmed Milk Powder): Neutral – good availability allows flexible purchasing

Now is the time to secure long-term contracts where possible – especially for export business. Buyers waiting for further short-term price drops may be in for a surprise.

Q3 2025