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Dairy Market Update: Slump? Newsletter, 8 September 2025

Dairy Market Analysis from 8-9-25; Milchmarkt Marktanalyse vom 8-9-25

Marked negative trends

Dairy Market Analysis from 8-9-25; Milchmarkt Marktanalyse vom 8-9-25

Review and Outlook

European milk deliveries remain above last year’s level despite seasonal decline, but no visible demand recovery has followed the summer holidays. Butter and cheese prices are under pressure: block butter and semi-hard cheese weaker, exports hampered by a strong euro and US competition. Skimmed and whole milk powder prices are falling, only whey powder remains firm. Overall, the market is softening, with the latest GDT auction showing –4.3 %, confirming downside risks.

  • Milk deliveries: In Germany, seasonally lower (week 34: –1.2 % vs. previous week), but still +2.3 % vs. last year. France: only +0.8 % vs. last year.

International Developments

  • H1 2025: global trade in cheese, butter and whey increased, while SMP and WMP declined. The EU lost market share to the US and New Zealand.
  • UK: record milk volumes despite heatwaves (+5.6 % in July).
  • Australia: weak start to the 2025/26 milk year (July –4.0 % vs. previous year).

Germany

  • July 2025 milk prices (estimate): nationwide about 53 ct/kg (+18 % y/y).
  • Highest prices in eastern Germany (+20 % y/y).

GDT Auction September: Sharp price drop

The first GDT auction in September saw a steep decline:

  • Overall index: –4.3 %
  • SMP: –5.8 %
  • WMP: –5.3 % (main product, ~50 % of supply)
  • Mozzarella: sharp drop
  • Cheddar: only product to rise, slightly higher
  • Milk fat: also weaker, but less so than powders

This was not the largest decline of 2025 (–7 % in late May), but the second steepest.

EU Imports–Exports

In June 2025, EU exports fell sharply (notably WMP, cream, lactose), while imports rose strongly, especially in butterfat products. Year-to-date exports are slightly negative, pressured by high EU butter prices reducing competitiveness. At the same time, dairy stocks have shrunk significantly, pointing to a tighter supply situation.

The 20 largest dairies (source: Rabobank)

Dairy Market Analysis from 8-9-25; Milchmarkt Marktanalyse vom 8-9-25

Switzerland
The Swiss Dairy Organisation has approved support measures worth over CHF 16 million to subsidise exports of milk fat to the EU and beyond.

Slump?

The market has been waiting for weeks for post-holiday demand to pick up. Autumn holidays are approaching, yet demand impulses remain absent. They will come – the only question is when, perhaps not until autumn 2026? Prices will remain under pressure, but contract milk prices are high enough to make a collapse unlikely.

The Outlook

Q3 2025 – Fragile

  • Gouda: negative trend
  • Mozzarella: price pressure amid continued high production
  • Cagliata: little room for movement
  • Fat: weak, export difficulties
  • SMP: weak, export demand poor
  • Whey proteins: stable
  • Sideways trend expected until end of Q3, buyers remain cautious

Q4 2025 – Growing risks

  • Gouda: prices likely to fall, almost certain from December
  • Mozzarella & Cagliata: pressure intensifies
  • Fat: demand stable, exports weak, prices softer
  • SMP: downward tendency, exports stagnating
  • Whey products: broadly stable
  • From November/December, corrections likely, especially for butter and cheese

Q1 2026 – Correction phase likely

  • Seasonal rise in milk volume adds pressure until spring
  • Weak exports, strong competition from New Zealand and the US
  • Butter and mozzarella particularly vulnerable to price corrections
  • Whey proteins: typically weaker after December/January demand peak – “the steam is out”

Q1 2026 is expected to be weaker than Q4. The markets may leave the 2025 high-price phase behind and enter a longer adjustment period.

Recommendation

  • Prefer short-term planning – risks for Q4 and Q1 are high
  • Secure key products – particularly butter and mozzarella
  • Be cautious with SMP and Cagliata – avoid long-term commitments

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

  • Mondial du Fromage, Tours – 14-16 September 2025
  • 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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