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Dairy Market Update: Stabilisation or the start of a correction? Newsletter, 25 August 2025

Fri, 08/22/2025 - 12:31

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

Uneven price developments with a negative tendency

Dairy Market Analysis from 25-5-25; Milchmarkt Marktanalyse vom 25-5-25

Review and Outlook

Milk supply

Germany: The seasonal decline in deliveries has recently slowed. Week 32: -0.1% vs. previous week, but +2.2% year-on-year.
France: Milk volumes +3.9% year-on-year.
EU-27: In the first half of 2025, cheese exports rose (+1.2%) as did skimmed milk powder (+2.6%), while butter (-3.4%) and whole milk powder (-22.9%) fell.

Producer prices

Germany (June): €53.31/100 kg – the highest level since the start of the year, +16.8% year-on-year.
Organic milk: €65.12/100 kg (+15.8% year-on-year). Premium over conventional: +€11.80/100 kg.

Production

Germany, H1 2025:
– Milk: -2.0% vs. previous year.
– Cheese: total -0.7%. Declines mainly in semi-hard cheese (-4.1%), pasta filata (-2.6%) and semi-soft cheese (-6.0%). Increases in fresh cheese (+4.2%) and sour milk/cooked/whey cheese (+1.0%).
– Butter: +4.7%.
– Skimmed milk powder: +4.9%.
– Buttermilk powder: +3.9%.
– Whole milk powder: +1.7%.
– Whey powder: -8.8%.
Netherlands, H1 2025:
– Milk: -1.2%.
– Cheese: -1.6%.
– Butter: -10.8%.
– Whole milk powder: -11.9%.
– Skimmed milk powder: -0.8%.
Turkey, H1 2025: Milk volumes +1.3% vs. previous year, but growth momentum significantly weaker.
Australia, dairy year 24/25: -0.5% vs. previous year (8.56m tonnes). June: -5.2% vs. previous year.

GDT results (August, 2nd auction)
The second Global Dairy Trade auction in August once again gave no sign of market recovery after the summer holidays. As expected, red figures dominated.

AMF and whole milk powder: slight increases of max. +0.3%
Mozzarella: sharpest fall, -2.7% to $4,447/t
Butter: fourth consecutive decline, -1% to $7,144/t – lowest since January; under pressure from cheaper New Zealand offers, while European product remains above $8,000/t
Skimmed milk powder: -1.8% to $2,756/t – continuing the fluctuating pattern of recent months

Switzerland

Switzerland has been hit hard by the 39% US tariffs. Estimates suggest that around 70% of the market could be lost. The two largest importers are Emmi and Migros Industries.

For Emmi, the decline is painful but not catastrophic, as imports account for only about 15% of its US turnover. For Migros Industries, the situation is far more precarious, as virtually 100% of its US business depends on imports. This raises the question of how long Migros will maintain its import organisation.

For the already struggling Swiss dairy sector, the tariffs represent a major challenge – one that can only be managed if the industry acts in a coordinated way.

Stabilisation or the start of a correction?

On the one hand, milk production remains high; on the other, export prospects are deteriorating. In addition to the US tariffs, the currency situation is weighing on the market. It is still too early for precise forecasts, but caution is warranted.

Outlook Q3/Q4 2025

Q3 2025 – stabilisation, but fragile

Gouda: stable with a negative bias
Mozzarella: price pressure amid persistently high production
Cagliata: seasonally stable, but little upside
Fat: solid domestic demand, export difficulties
SMP: stable in the EU, weak exports
Whey proteins: strengthening
By the end of Q3, a sideways trend is most likely – fragile, with buyers remaining cautious.

Q4 2025 – growing risks

Gouda: prices may soften
Mozzarella & Cagliata: increasing downward pressure
Fat: domestic demand stable, exports stagnating, prices could weaken towards year-end
SMP: stable demand but negative bias, exports stagnating
Whey products: no clear direction
Calm conditions may end in November/December – price corrections likely, especially in butter and mozzarella.

Q1 2026 – correction phase likely

Milk volumes continue to rise seasonally, adding supply pressure through to spring.
Exports remain weak, with strong competition from New Zealand and the USA.
Butter and mozzarella particularly vulnerable to price corrections.
Whey proteins: after the demand peak in December/January, often weaker – “the steam is gone”.
Q1 2026 is likely to be weaker than Q4, with markets moving out of the high-price phase of 2025 and into a correction.