Dairy Markets: Divergence Newsletter 27 April 2026
«The herdsman who only looks at yesterday misses tomorrow's weather.»
Antoine the Cheesemaker, Gruyères, around 1680
Review & Outlook
The seasonal peak is approaching milk volume growth has slowed noticeably in Germany and France. Milkfat continues to correct sharply downward, while Flower Meadow cheeses and functional branded cheeses stabilise the market. Pure volume cheeses such as Decanter Cagliata are coming under pressure. Whey proteins remain structurally in demand – pulling SMP and casein along in their wake.
The EU Commission forecasts milk volume growth of +0.2% for 2026. As H1 has already significantly overshot this figure, the forecast implies a decline below the prior-year line in H2. We remain cautious on Q4, however: in recent years, prices have been driven more by volumes in the US and New Zealand – neither of which is currently signalling a decline for Q4.
Milk Deliveries
- Germany (Week 15): +0.1% week-on-week, +5.8% year-on-year.
- France (Week 15): +0.6% week-on-week, year-on-year lead narrowed to +1.1%.
- International (March 2026): New Zealand +9.7%, Q1 +5.5%. Argentina +7.9%, Q1 +9.4% – growth slowing. Netherlands +6.0%, Q1 +5.8%.
- EU-27 (February 2026): +4.8% year-on-year, Jan–Feb cumulative +4.9%. The EU Commission forecasts only +0.2% for full-year 2026 – a strong H1 offset by a weak H2.
Cheese
Flower Meadow cheeses (raw milk): Parmigiano Reggiano stable (+1.0% over 4 weeks, +14.4% over 12 months). Allgäu Emmentaler –2.2% week-on-week – very strong demand, stable medium-term outlook. Antoine Alpage 36 months (–1.0% currency effect), Red Wine Alpine (–1.0% currency effect).
Standardised pasteurised cheeses: Fifth consecutive week of decline: Edam (–2.8%), Gouda (–2.5%), Mozzarella (–2.2%). EU Emmentaler bucking the trend at +3.1%. Buyers cautious, stocks still low, demand intact.
Hi-Lo cheeses (high protein, low fat): Grana Padano stable. Gran Pasta and Cagliata Walo –1.0%, currency effect. Segment overall stable.
Volume cheeses: Decanter Cagliata (White Cheese) –4.2% – the clearest reflection of current milk surplus.
Milk Powders
Market sentiment divided: SMP buyers hesitant at elevated price levels, whey products structurally firm. SMP food-grade +5.0% (second consecutive week of gains), WMP –0.3%. WPC80 just below €22,000/t, deals already concluded up to €23,000/t (instant grade); upward trend continues into Q3/Q4. Substitution pressure from WPC70/60 and MPC is increasing, but simultaneously supporting prices across broader whey fractions, through to food-grade whey powder (~€1,800/t) and liquid concentrate (~€1,000/t dry matter).
Liquid and Fat Markets
Raw milk spot at year-to-date low; seasonal recovery expected in coming weeks. Seasonal volume peak combined with fewer processing days due to public holidays is depressing semi-finished products: skimmed milk concentrate –€240 to €620/t, whey concentrate –€230 to €635/t – unusually, SMC is now priced below whey concentrate for the first time. Cream in Northwest Europe –€440/t.
Butter Germany –€80/t; high stock levels and cautious buyers. Export demand from the Middle East reverting after a brief conflict-driven spike.
GDT Event 402 – 21 April 2026
A clear correction: index –2.7%, driven by Butter (–7.9%) and AMF (–9.6%), Mozzarella (–3.1%), while SMP (+3.2%) and Cheddar (+1.1%) gained. Fat markets under pressure despite lower New Zealand supply; proteins remain firm. Forward curve for Butter/AMF steeply in contango; WMP and SMP firmer on deferred contracts.
Switzerland
Seasonal peak not yet reached; drying capacity fully utilised. AOP varieties facing greater volume pressure; branded products – Flower Meadow raw milk and functional segments – significantly more stable.
Recommendations
Geopolitical uncertainty is amplifying volatility – no broad-based hedging recommended at current levels. Use the current dip selectively to close volume gaps in Q2/Q3, with a focus on cheese.
Q2 2026 – Use the dip:
- Gouda/Semi hard cheese, Mozzarella, Cagliata: stable to rising.
- SMP: uncertainty weighing on market.
- Butter: volatile, bias to the downside (stocks a burden).
- Whey proteins: sideways (WPC80 and WPI in strong demand).
- WMP: stable to rising, potential weakness in September.
Q3 2026 – Broadly stable:
- Cheese and Cagliata: stable, potential September weakness.
- SMP: slightly firmer, September risk.
- Butter: volatile, bias to the downside.
- Whey proteins: sideways, potentially rising into autumn and Christmas.
- WMP: stable, potential September weakness.
Q4 2026 – No forecast possible.
- Drivers for rising prices: solid demand, low stocks, strong whey protein demand.
- Risks: high cow numbers in New Zealand, potential USD weakness, EU milk curve similar to 2025, prices in recent years typically declining from October onward.
Recommendation:
- Q2/Q3: use the dip, focus on cheese. If the EU forecast materialises, prices in Q3 will rise.
- Q4: no hedging; downside risk dominates. If necessary, small volumes only via options or tranches.
Strategic Outlook – "Strategy beats opportunism"
Milk volume growth in Europe is likely to remain moderate in 2026 – a trend reversal in 2027 cannot be ruled out. Those who buy opportunistically today risk being left without reliable suppliers in a tighter market. Securing your supplier base for the long term is not an option – it is a strategic necessity.
Strategy beats opportunism – those who lock in the right partners today will have supply in 2027 when others are searching.
Our Trade Fair Presence 2026
- Tutto Food Milano – 11–14 May 2026
- Salon du Fromage, Paris – 7–9 June 2026
- Summer Fancy Food – 28–30 June 2026
- SIAL Paris – 17–21 October 2026
- World Cheese Awards, Córdoba – 12 November 2026
- Marca Bologna – 13–14 January 2027
Treat yourself to a genuine Swiss raw‑milk flower meadow cheese not just a pleasure, but a small piece of joy for the soul.
Warm regards, Affineur Walo
This forecast is based on our market knowledge. It does not constitute a definitive prediction, and we accept no liability should it prove incorrect.
