Milk Market Update: Beginning of the downward spiral? Market Analysis from 4 April 2025
Feed prices are showing a slight increase, while prices for protein concentrates (casein) remain stable. In contrast, skimmed milk powder, spot milk, milk fat, and cheese are experiencing a slight decline.
Market development: Retrospective and Outlook
The market is currently quiet—too quiet. It appears everyone is waiting to place their orders for the “Liberation Day”. We will analyse the effects of the new tariffs from the “Liberation Day” in our newsletter on 11 April 2025.
On Wednesday evening, it happened: a 31% tariff on Swiss exports and 20% on EU exports. If this also applies to dairy products, it will impact Swiss cheese.
A 20% decline in exports would mean that Swiss cheese loses about 2.0% of its export volume, which constitutes less than 1% of total production or approximately 0.5% of Swiss milk production.
However, the individual varieties will be affected differently. Le Gruyère will be particularly impacted, with an export share of 40%, of which 33% goes to the USA. Switzerland Swiss has an export share of 63%, with 75% of that going to the USA. Le Gruyère has an advantage here, as the substitute cheeses have a different quality, while the subsidised products from Switzerland Swiss are partially of comparable quality. The largest exporters to the USA, holding a market share of 80%, are Emmi and the Migros industry. Both of which have the economic strength to withstand this challenge unscathed. This could lead Migros to reconsider its cheese export strategy and possibly conclude that further investments are not strategically sensible.
For all other varieties, the export share to the USA is 10% or lower. Despite these relatively minor impacts, we expect that much will be reported about this soon and that discussions about subsidies will commence.
The detailed impacts of the new tariffs on "Liberation Day" will be analysed in our newsletter on 11 April 2025.
Market Situation in Switzerland
The Federal Office for Agriculture published the milk price development for 2024.
https://www.agrarmarktdaten.ch/blog/produzentenpreis-fur-milch-sinkt-im-jahr-2024
We quote:
Conclusion:
“In 2024, both producer and consumer prices for dairy products saw a slight decline, following several years of continuous increase. Factors contributing to the downward trend in the producer price of milk include the delayed impact of price declines in the EU on Switzerland, the increase in milk volume in the B-segment, and the decrease in the reference price for milk delivered to dairies. Furthermore, the respective production method and utilisation type significantly affect the producer price of milk and its development. The price of cheese milk is influenced by regional differences that can be explained particularly by the various types of cheese produced from this milk. The price of milk for dairies declined more sharply than the price for cheese milk (commercial dairies). The end product and its popularity in the market significantly determine the price of raw milk as a commodity. Additionally, a slight price decrease for most dairy products was observed in the retail sector in 2024.”
The analysis is precise; however, there are unfortunately no recommendations for future policies.
Beginning of the downward spiral?
Prices have been slightly weaker for the past three weeks but remain at a high level. The spot milk price is at €0.48; this time last year, it was €0.35. It has been slightly declining throughout April and has already risen again at the beginning of May. Additionally, it is very dry in the north of New Zealand, resulting in reduced milk production. Therefore, we do not believe in a sustained downward spiral.
Outlook for Q2 and Q3 2025
- Q2 2025: For cheese and milk fat, we expect stable to rising prices, depending on the blue tongue disease and the weather.
- Q3 2025: For the third quarter, we anticipate rising to sharply rising prices for cheese and milk fat.
It is worth noting that US trade policy can lead to unexpected upheavals in the milk market at any time.
We will be present at the following trade fairs:
- Tutto Food, Milan, 5–8 May 2025, Hall 1 Stand U07
- PLMA, Amsterdam, 20 & 21 May 2025,
- International Cheese Awards 2025
- Summer Fancy Food, New York, 29 June – 1 July 2024, with our partner World's Best Cheese
- Le Mondial du Fromage et Produits Laitiers, Tours (France), 14–16 September 2025, We will have a stand.
- Anuga, Köln 4 – 8. October 2025, with our Partner Dicke Food
- World Cheese Award, 13 – 15. November 2025, Bern, we will have a stand
- Winter Fancy Food, San Diego, 11 – 13 January 2026 with our partner World's Best Cheese.
- Marca, Bologna, 14 – 15 January 2026, I will visit the show
- Salon du Fromage, Paris, 7th – 9th June 2026, with our Stand
Stay informed! Enjoy the exquisite Swiss flower meadow cheese made from raw milk – not only a delight but also healthy and soothing!
Kind regards, Affineur Walo
