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Dairy Market Update: Structural Crisis Newsletter – 1 December 2025

Thu, 11/27/2025 - 20:33

Dairy Market Analysis from 1-12-25; Milchmarkt Marktanalyse vom 1-12-25

Dairy Market Analysis from 1-12-25; Milchmarkt Marktanalyse vom 1-12-25-25

Review and analysis

Bear market within a structural crisis.

Milk fat remains under pressure – even in the high-consumption pre-Christmas period. Well-stocked inventories make further price declines in early 2026 likely. Protein prices have held up so far – and need to do so if the milk price is not to slide. Overall, we are clearly in a bear market, exacerbated by structurally weak players pushing rock-bottom prices.

The crisis is exposing weaknesses in individual cooperatives and accelerating the shake-out: FrieslandCampina is merging with Milcobel, Arla with DMK, and Hochwald is selling its yoghurt business to Müller. The winners are efficiently run private-label and brand-driven players. In 1–2 years, the dairy landscape is likely to look different: a few even larger, volume-driven groups and a handful of focused, market-oriented winners.

Milk deliveries

Germany: Week 46 around +7.5% year-on-year, with higher fat and protein contents than in 2024.
France: most recent figures approx. +5.3% year-on-year.
Netherlands: October +7.8% vs. previous year, Jan–Oct +1.3%.
Poland: October +5.7% vs. previous year, Jan–Oct +3.3%.
USA: Jan–Oct 2025 +2.4% vs. previous year, with higher fat levels.
New Zealand: Jan–Oct +2.0%, seasonal peak in October; nevertheless, Fonterra has cut its milk price forecast (now equivalent to roughly 34.5 ct/kg EU standard milk).
Australia: opposite trend – Jan–Oct −2.2% vs. previous year.
Argentina: strong recovery after the drought year; Jan–Oct +10.8% vs. previous year.

Stocks

USA

Cheese inventories slightly higher than a year ago (+1.7%),
Skim milk powder clearly higher (+10.4%),
Butter and whey powder significantly reduced (butter −5.7%, whey powder −16.1%).
Compared with July, all four product groups have been seasonally drawn down somewhat (most notably butter −7.7%).

EU / Germany

Ripening stocks for sliced/semi-hard cheese are described as “low”; free volumes for additional spot purchases are scarce.
For butter, the tone is more “wait-and-see with easing prices” rather than one of scarcity.

FrieslandCampina

FrieslandCampina is cutting its milk price for December once again by €2.50/100 kg, bringing it down to the lowest level in five years (base guaranteed price for standard milk: €43.50/100 kg; base price NL: €42.66/100 kg, maximum incl. premiums: €47.66/100 kg).

In Belgium, the milk price drops to €41.40/100 litres (−€2.42/100 l), while the organic guaranteed price – supported by slightly positive developments in the organic market and including a winter bonus – edges up to €68.71/100 kg.

Switzerland

What we are seeing in the EU is increasingly visible in Switzerland as well: structurally weak players are pushing into the market with rock-bottom prices, while volume-driven models are reaching their limits. Cremo is emblematic of this: five consecutive loss-making years (–16.9 million CHF in 2024), a further deterioration since summer 2025, and the CEO stepping down with immediate effect – the result of years of concealed structural problems, complex sites and politically driven decisions.

Suppliers and farming families are left to foot the bill. In many farmer-dominated boards, strategic leadership is lacking; the close intertwining of associations, boards and politics encourages the postponement of necessary structural adjustments, making crises all the more severe.

Structural crisis?

The current disruptions are driven less by a classic bear market than by necessary structural adjustments – we are in the midst of a structural crisis. Such phases pass, but mergers and other forms of consolidation usually only partially address the underlying problems and in some cases create new inefficiencies: all too often, essentially healthy entities assume the risks of exiting companies without sufficient prior analysis.

Q4 2025: trends & risks

Gouda: sideways
Mozzarella: sideways
Cagliata: broadly sideways
Fat: still weak, tending lower
SMP: sideways
Whey products:
- WPC80: clearly firmer
- Sweet whey powder / permeate: stable to slightly firmer

Year-end sales are largely completed – Q4 as a whole is likely to move sideways at a low price level.

Q1 2026: stable to slightly higher prices possible

Milk volumes in New Zealand are declining,
stock levels in Europe are manageable in many segments – with the notable exception of milk fat,
export dynamics will depend heavily on the USD exchange rate and US milk production.

At this stage we see very few signals for rising markets in Q1, especially not for fat. The decisive factor will be milk volumes in the coming weeks; colder weather could have a dampening effect.

Recommendation

The arguments for a cautious bottoming-out are increasing; however, a renewed setback remains possible.

Approach:

Those who have already covered around one third of their Q1 needs and a smaller portion of Q2 can afford to observe the current weakness rather than buying aggressively.
The latest price cuts in the Netherlands signal ongoing scepticism in the market; in part, they likely also reflect attempts to compensate for previous months’ losses.

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