Dairy Market Update: What are buyers waiting for? Newsletter – 13 June 2025
Prices remained mostly stable last week, with the exception of milk fat (+0.5%) and spot milk (+2%), which saw notable increases.
Market Developments: Review and Outlook
There is still no clear trend – but signals are intensifying. Milk deliveries continue to decline seasonally, while spot milk becomes more expensive. Butter remains in strong demand. A significant portion of milk fat is being absorbed by high cheese production, alongside weather-related demand for fresh dairy products – both factors tightening fat availability and pushing prices up.
Compared to twelve months ago, the trend is clearly upwards: milk fat prices are up 14% year-on-year, spot milk even 20%. The key question now: will butter, cheese and fresh products follow spot milk?
USA: Milk Fat Surplus Meets Export Barriers
In April, US butter and cheese production hit new record levels – yet the domestic market struggles to absorb the resulting milk fat surplus. The aggressive expansion of whole milk powder production (+36% YTD) reflects this imbalance. At the same time, political tensions with China are weighing on exports: whey shipments dropped by 30% in April, following stockpiling by Chinese buyers in March.
Alternative markets such as Southeast Asia are growing, but remain too small to offset the loss of Chinese demand.
Summer Calm Likely - But Structural Imbalances Remain
The market appears to be settling into a quieter summer phase, particularly for liquid milk and powders. Yet structural imbalances persist: milk production is falling in parts of Europe (e.g. the Netherlands), while the US continues to face a fat surplus.
Geopolitical tensions (US–China, India–US) are also reshaping trade flows – particularly for whey, mozzarella and analogue products.
Switzerland: Misguided Policy?
Swiss cheese exports remain under pressure. While US tariffs are often blamed, the strong Swiss franc is arguably the bigger problem.
The leading export category is now low-fat industrial cheese, accounting for nearly 20% of exports – and yet there are political efforts to end support for this segment. Such a move would destabilise the market and place significant pressure on Swiss milk prices.
What are buyers waiting for?
In the butter market, recent price increases led many to secure Q3 and Q4 contracts early. In cheese, however, many buyers are still holding back – despite falling milk deliveries, rising demand (especially from Southern Europe), and clear cost developments.
Only cheddar faces real downward pressure from US competition – but not all European producers can easily shift to alternative cheeses.
Outlook for Q2 and Q3 2025
Q2 2025
- Gouda: Buy now – stable prices with mild upward pressure
- Mozzarella: Buy now
- Cagliata: Buy now
- Milk fat: Fix contracts – summer demand meets structural tightness
- SMP: Neutral – solid supply allows for flexible buying
→ Now is the time to secure long-term contracts where possible – especially in export. Buyers hoping for further price drops may be caught off guard.
Q3 2025
- Gouda: Price increases likely – secure 30–50% now
- Mozzarella: Order now for August delivery
- Cagliata: Secure Q3 volumes
- Milk fat: Continued strong demand and tightening availability
- SMP: Neutral – no clear price momentum
- Whey proteins: Volatile, but no sharp increases yet
Meet Us at These Events – 2025/26 Trade Fair Calendar
- International Cheese Awards
- Summer Fancy Food, New York – 29 June–1 July 2025
- 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
Treat yourself to a real Swiss Flower meadow cheese made from raw milk.
Not just a delight – but good for the nerves, too.
Kind regards,
Affineur Walo
