Newsletter

Milk market: Upward trend? Newsletter – 16 March 2026

Thu, 03/12/2026 - 18:44

Those who respect milk will not be disappointed by it. (from the notebook of our cheese artist Antoine)

Review & outlook
While the US risks a Waterloo in Iran, the European milk market is broadly moving as expected. Milk collections continue to exceed processing capacity, yet product prices are rising, with block cheese in particular trading very firm. The apparent paradox dissolves once we take demand seriously: producers are sold out, inventories in maturation cellars are very low with a young age structure, and the Easter season has not even started yet.

The market confirms what we have been communicating since the beginning of the year: volume growth alone does not set the price. What matters is whether additional milk can be converted into marketable products for which there is real demand. At present this is working – and prices are following.

From today’s perspective, a sideways scenario looks likely for Q3 2026 – at the price level that will be established in May/June. With the current price increases in March/April, we are moving towards exactly this new “normal range”. Hedging at current levels is hardly attractive anymore – most of the margin has already been used up. The only exception: use any dip selectively and in tranches.

Milk supply

Germany: week 9 +1.1% versus previous week and +6.2% year‑on‑year.
France: +5.2% year‑on‑year.

Milk supply January 2026

Netherlands: +6.0% versus January 2025.
United Kingdom: +4.1% versus January 2025.
Ireland: +4.2% versus January 2025.
Poland: +4.3% versus January 2025.
USA: +3.2% versus January 2025.
New Zealand: +2.0% versus previous year in the 2025/26 milk year to date.

Structurally, cow numbers have not yet adjusted to the price correction – in Germany, 4.1% fewer cows were slaughtered in January 2026 than a year earlier; for 2025 as a whole, cow slaughter numbers were 7.3% below 2024.

Milk fat
Cream prices gained another 6.2% in week 11 after the sharp jump in week 10, reaching EUR 5,310/t (with some trades as high as EUR 5,700/t), while butter and AMF moved up more modestly to EUR 4,725/t and EUR 5,550/t respectively. The price spread between cream and butter has narrowed significantly. Despite seasonal demand impulses (Easter, ice cream) and geopolitical uncertainty, sentiment turned softer towards the end of the week.

Powders
All dairy powders recorded solid price gains: SMP and WMP continued to firm, while whey powder and lactose moved up particularly strongly, supported by robust demand and tight availability. Overall, the powder complex remains firm but volatile; sentiment is positive, yet there is clear uncertainty about the further price path.

Cheese
Cheese prices are broadly recovering, with particularly dynamic gains for Gouda, Edam, Mozzarella, Emmental and Maasdam, driven by strong demand, limited availability and few producer offers. The Cheddar complex is lagging, with only moderate week‑on‑week and month‑on‑month gains. The market is described as firm overall, with buyers especially focused on Gouda and Mozzarella.

🇨🇭 Switzerland – political activism
In Switzerland, the milk surplus has firmly entered the public spotlight. Private and public media alike are highlighting the issue, politicians are jumping on the bandwagon, designing new steering models and floating protectionist ideas – while ignoring the fact that such surpluses tend to be cyclical phenomena that occur every 10 to 15 years and are short‑lived. What Switzerland really needs is a stable marketing framework with clearly defined roles for all market participants (producer organisations, processors, retail, export) so that volumes are channelled into value‑adding outlets instead of every cyclical surplus triggering reflexive activism.medien.srf+3

Forecasts
Q2 2026

Gouda / block cheese: slightly firmer
Mozzarella: slightly firmer
Cagliata: slightly firmer
SMP: slightly firmer
Butter: symmetric risk – no active view
Whey proteins: slightly firmer
WMP: slightly firmer

Q3 2026 (broadly stable, in line with previous years.)

Gouda / block cheese: stable
Mozzarella: stable
Cagliata: stable
SMP: slightly firmer
Butter: symmetric risk – no active view
Whey proteins: slightly firmer
WMP: slightly firmer

Q4 2026

Drivers of higher prices

Healthy demand
Low inventories
Strong demand for whey proteins

Risks

High cow numbers in New Zealand
Weak US dollar
EU milk curve similar to 2025

In recent years, prices have usually declined from October onwards

Recommendations

Q2 2026: It is very likely too late to secure any particularly attractive prices.
Q3 2026: At current levels, outright hedging is not attractive; the only exception is to buy selectively and in tranches if the market dips.
Q4 2026: Clear non‑recommendation for hedging at this stage – first wait and see how Q3 develops. Downside risk is assessed as greater than the upside potential.

Strategic Outlook – “Strategy Beats Opportunism”

Milk volumes may grow only modestly in 2026 and could decline again in 2027. Now is the ideal time to secure your supply base on a long-term basis – to ensure availability when production tightens.

Whether producer or processor – we bring market intelligence, reliable partnerships, and Swiss quality expertise to help your business grow.

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