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Dairy Market Update: Oversupply? Newsletter – September 29, 2025

Dairy Market Analysis from 29-9-25; Milchmarkt Marktanalyse vom 29-9-25

High production meets weak demand

Dairy Market Analysis from 29-9-25; Milchmarkt Marktanalyse vom 29-9-25

Review and Analysis

  • Significantly more milk worldwide – in Europe (especially DE, FR, PL, NL) and in the export regions (USA, New Zealand).
  • Butter has seen demand impulses, but otherwise demand remains subdued.
  • Massive price decline for cheese and powders, butter showing signs of stabilization.

Milk production developments in different countries and regions

  • Germany: +5 % vs. previous year, clearly above 2023.
  • France: +2.9 %.
  • Netherlands: August +4.8 %, cumulative –0.2 %.
  • Poland: August +4.9 %, cumulative +2.7 %.
  • Austria: July +5.2 %.
  • Ireland: August +3.6 %, cumulative +6.8 %.
  • UK: August +6.7 %.
  • USA: August +3.2 %, herd expanded to 9.52 million cows (+1.9 %), cumulative +2.1 %.
  • New Zealand: Season start +1.8 %, cumulative +3.1 %.

2. Demand side

  • Fresh products: Demand in the EU normal to subdued.
  • Butter: Retail price cuts spurred strong demand for packaged butter; block butter has found a floor.
  • Cheese: Domestic consumption normal, but buyers remain cautious. Exports suffer from strong euro and competition.
  • Powder: Weak demand, especially in exports; mainly existing contracts fulfilled.

3. Price development

  • Cheese: Gouda, Cagliata, Mozzarella –14 to –15 % month-on-month; –25 to –33 % year-on-year.
  • Butter: Packaged butter weaker, block butter stabilizing.
  • Powders: SMP –15 % in 4 weeks, –32 % year-on-year.

Switzerland

  • Milk production Jan–July stable to slightly higher (+0.6 %), July +4 % vs. last year.
  • Cheese production +4.5 %, mainly Gruyère, Emmentaler, fresh cheese, industrial varieties.
  • Butter and powder significantly lower → more milk directed into cheese and fresh products.
  • Drinking milk remains in decline; July was an exception.

Exports Jan–Aug 2025

  • Fresh cheese/Quark: +18.3 % (10,194 t).
  • Semi-hard cheese total: +3.5 % (13,954 t).
    • Appenzeller® stable (–0.8 %).
    • Raclette –21.8 %.
    • Vacherin Fribourgeois –25.2 %.
    • Tête de Moine +3.8 %.
    • Other semi-hard cheeses <45 % fat i.t. +20.6 % (+768 t).
  • Hard cheese total: –3.6 % (20,363 t).
    • Emmentaler –1.0 %.
    • Gruyère –11.6 %.
    • Sbrinz +270 % (small base).
    • Switzerland Swiss –10.7 %.
    • Other hard cheeses <45 % fat i.t. +11.9 % (+482 t).
  • Soft cheese: –16.9 % (249 t).
  • Prepared fondue: –7.5 % (1,320 t).
  • Processed cheese: stable (–2.4 %, 460 t).

By country (Jan–Aug 2025)

  • Germany: 22,491 t (46 %), stable.
  • Italy: 9,219 t (–0.5 %).
  • France: 3,429 t (–3.8 %).
  • Benelux: 1,777 t, stable.
  • USA: 4,329 t (+10 %, advance buying before tariff increase).
  • Canada: 1,452 t (+44 %).
  • Other Europe: 1,765 t, stable.
  • Other countries: 7,541 t, slightly higher.

Imports Jan–Aug 2025

  • Total 54,399 t (+2.3 %).
  • August 2025: 6,540 t (–3.5 %).

Oversupply?

The situation is clear: too much milk with weak demand.
Reasons: delayed calvings (bluetongue disease), production incentives from high milk prices, strong euro (export brake). In Switzerland this is compounded by an even stronger franc and 39 % tariffs in the USA since August 7.

Q4/2025: Trends & Risks

  • Gouda: price pressure.
  • Mozzarella & Cagliata: price pressure.
  • Fat: massive price pressure.
  • SMP: negative trend.
  • Whey products: negative trend.

October likely sideways at low levels; from November a “year-end sale” is likely.

Q1/2026: Correction phase likely

  • Milk volumes rise seasonally; supply pressure builds through spring.
  • Exports weak; strong competition from New Zealand and the USA.
  • Butter and Mozzarella particularly vulnerable to further price corrections.
  • Whey proteins: after demand peaks in Dec/Jan, usually weaker – “the air is out.”

Outlook: Q1/2026 likely weaker than Q4. A longer correction phase is expected until Q3/2026.

Recommendation

  • Prefer short-term purchasing, risks in Q4 and Q1 are high.
  • Link long-term contracts to an index wherever possible.

Meet us in Person – Our Trade Fair Presence 2025-26:

  • Anuga, Cologne – 4-8 October 2025
  • World Cheese Awards, Bern – 13-15 November 2025
  • Winter Fancy Food, San Diego – 11-13 January 2026
  • Marca, Bologna – 15-16 January 2026
  • Tutto Food Milano – 11-14 May 2026
  • Salon du Fromage, Paris – 7-9 June 2026
  • SIAL, Paris – 17-21 October 2026

A Taste of Switzerland: Treat yourself to a genuine Swiss Flower meadow cheese made with raw milk not only a true delight, but also a little piece of joy for the soul.

Warm regards, Affineur Walo

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