Bulls Have Little To Gain, Bears at Lot!

The past three trading days of this week have been hard to summarize. We continue to see a tight spot market for liquids, a slightly more bullish GDT than expected, and simultaneously, prices for butter and cheese for Q1 are trending lower. Milk volumes across Europe appear to be improving, and the arrival of products from New Zealand and Australia is starting to impact the supply and demand ratios in the EU. For powders, there has been a sharp increase in imports from Southeast Asia and China, but the strong gains of the past few days are fading again. It's hard to establish a clear trend for the entire dairy market, but let’s give it a try.

GDT Overview

First, we observed a slightly more bullish GDT than expected, with a 1.9% increase primarily driven by the strong rise in WMP. Butter showed a modest increase of 0.5%, though EU butter prices were slightly down. AMF posted a 1% increase, reaching its highest price in at least five years. Cheese prices performed worse, with Mozzarella dropping 6.6%, returning to pre-summer price levels. With the high-demand season still months away, a swift rebound in the coming GDT events is unlikely. Cheddar also performed poorly, undergoing a correction after eight consecutive gains. SMP prices rose 0.9%, marking the highest price this year. The standout performer was WMP, which posted a 3.2% increase, its highest trade in the last 30 months.

While we wouldn’t have been surprised by a small correction, the relatively modest increases in butter and SMP align with our market view. We do not anticipate these commodities continuing to post higher prices; instead, we expect them to trade steadily sideways or even slightly downward from a European perspective.

Liquids: Still Very Tight, but Expected to Loosen Soon

The spot market for liquids remains strong. Cream prices traded lower towards the end of last week for some spot loads, but today’s prices are in line with or even higher than last week. Cream prices varied widely, with the lowest reported at €10,550 and the highest at €11,300. As one of our partners suggested, "These high prices reflect low availability rather than high demand." Relatively low available volumes continue to support higher price levels, even though demand is not particularly strong. It seems this tight situation for cream may last another 2–3 weeks, making the correction on butter a highly debated move.

Raw milk and SMC prices are trading in line with last week, although some traders report signs of loosening in the market as more volumes become available.

Conversations with producers and partners in the UK and Ireland suggest that both countries expect milk supply to grow year-on-year in the coming months. Strong milk prices, combined with relatively low energy, fertilizer, and feed costs, make milk production highly profitable. The UK is on track for a 4–5% increase in milk production, which could continue to add to commodity supply. In Ireland, year-end production is expected to finish strong, while earlier forecasts were conservative. Recent increases in offers from Ireland reflect this growth.

In the Netherlands, milk collection might still be down year-on-year in headline numbers, but milk solids are now surpassing last year’s levels. If this trend continues, more pressure on the market can be expected. Meanwhile, Germany’s milk production remains weak, with no signs of recovery. However, overall, the trend in milk collections indicates that the year-on-year declines are becoming a thing of the past. With favorable conditions, 2025 could see milk growth.

Butter: Limited Room for Upside, Significant Room for Downside

"At these high prices, the upward potential is minimal, while the downward potential is significant. This makes it more attractive to anticipate a bearish market than a bullish one," said one of our partners, summarizing the current market dynamics.

Spot indicators suggest an incredibly bullish market, with cream trading above €11,000 and some butter trades exceeding €9,000 for specific needs. However, generic brands or products for delivery after December 10th are trading at much lower levels, with prices for November/December around €7,550 and Q1 prices at €7,300. Futures for Q2 have been traded as low as €6,800, more than €2,200 below the highest reported prices.

Speculators see little potential for higher prices, and history suggests that a €2,000 drop is not unrealistic. Buyers who can postpone purchases stand to gain significantly by waiting, as this allows them to assess the effects of stock-building at high prices and increased EU milk production. But buyers should not get greedy. The overall S&D in our view remains increadably bullish long term, so if a cheap opportunity gets presented, the question is, who will treat themselves to present, and who will let it walk by, hoping for something better... ?

We expect to have sellers for

Product	Origin	Volume	Period	Price	Incoterm
Lactic Unsalted Fresh/Frozen	Irish	88	December	€ 7650	FCA NL
Sweet Cream Unsalted Frozen	Portugues	44	Nov-Dec	€ 8000	FCA PT
Sweet Cream Unsalted Frozen	Irish	44	Dec	€ 7850	FCA NL
Lactic Unsalted Fresh/Frozen	Arla DK	88	December	€ 7750	FCA NL
Lactic Unsalted Fresh/Frozen	NL/DE/BE	66	December	€ 7750	FCA NL
Lactic Unsalted Fresh/Frozen	NL/DE/BE	132	Q1	€ 7375	DAP NL

We Expect to have Buyers for

Product	Origin	Volume	Period	Price	Incoterm
Lactic Unsalted Fresh/Frozen	Irish	88	December	€ 7300	FCA NL
Sweet Cream Unsalted Frozen	Portugues	44	Nov-Dec	€ 7400	FCA PT
Sweet Cream Unsalted Frozen	Irish	44	Week 49	€ 7600	FCA NL
Lactic Unsalted Fresh/Frozen	Arla DK	66	Q1	€ 7250	FCA NL
Lactic Unsalted Fresh/Frozen	NL/DE/BE	66	January	€ 7250	FCA NL
Lactic Unsalted Fresh/Frozen	NL/DE/BE	132	Q1	€ 7280	FCA NL

Cheese: Likely to Follow a Bearish Trend

The cheese market appears poised to follow the bearish trends seen in GDT and butter. UK and Irish partners report that imports of New Zealand products are affecting demand for Irish cheddar. As a result, offered prices for UK/Irish cheddar (curd) have dropped from over €5,000 to closer to €4,800.

Mozzarella prices fell sharply on GDT and are now reflecting this trend in the EU market. Q1 offers have dropped by around €100 from last week’s €4,250, and sellers are willing to negotiate at slightly over €4,100. Spot prices are unclear due to a lack of buyers. Gouda prices are similarly under pressure, with November/December offers at €4,500 and Q1 prices declining, though the absence of bids makes exact pricing uncertain. Exporters report slowing demand from Korea, Japan, and the Middle East, adding to the bearish sentiment.

We Expect to have sellers for

Product	Origin	Volume	Period	Price	Incoterm
Gouda 48 Slicing	NL/DE	88	December	€ 4500	FCA NL/DE
Mozzarella 40%	NL/DE/BE/DK	88	Nov-Dec	€ 4150	FCA NL/DE/BE
Cheddar	UK	44	Dec	€ 4800	FCA UK
Gouda 48 Slicing	NL/DE	132	Q1	€ 4425	FCA NL/DE
Mozzarella 40%	NL/DE/BE/DK	66	Q1	€ 4175	FCA NL

We Expect to have Buyers for

Product	Origin	Volume	Period	Price	Incoterm
Gouda 48 Slicing	NL/DE	88	December	€ 4200	FCA NL/DE
Mozzarella 40%	NL/DE/BE/DK	88	Nov-Dec	€ 3900	FCA NL/DE/BE
Cheddar	UK	44	Dec	€ 4500	DAP NL
Gouda 48 Slicing	NL/DE	132	Q1	€ 4175	FCA NL/DE
Mozzarella 40%	NL/DE/BE/DK	66	Q1	€ 3975	FCA NL

Powders: Too Many Bulls to Make Us Bullish

The powder market remains bullish for many partners, citing increased exports to Southeast Asia, growing Chinese demand, low stocks, and a favorable Euro/Dollar exchange rate. While these arguments are logical, the predominance of bullish sellers raises caution.

Recent weeks have seen higher prices, but recent days have brought more offers to the market, export deals lost to competitors, and futures trading lower. As with GDT prices, we expect a slowdown for EU powder prices.

Q1 prices exceeding €2,650 seem unlikely in the short term. Spot market prices above €2,600 have not been seen since November 2022, so the recent uptick represents a break in the trend.

Product	Origin	Volume	Period	Price	Incoterm
Skimmed MIlk Powder MH	Solarec	100	Jan	€ 2725	FCA BE
SWP	Spanish	150	Nov-Dec	€ 975	FCA SP
D40	Spanish	200	Dec-March	€ 1025	FCA SP
Skimmed Milk Powder, Fresh	Solarec	300	Q1	€ 2800	FCA BE
SWP Monki	Polish	100	November	€ 1025	FCA NL
Skimmed Milk Powder 36%	EU	100	November	€ 2650	DAP NL

We would have the following bids

Product	Origin	Volume	Period	Price	Incoterm
FCMP BigBags	EU	96	January	€ 4220	FCA NL
Skimmed Milk Powder n 36%	EU15	44	November	€ 2550	DAP NL
SMP BC Spec	EU	300	Q1	€ 2650	DAP BE
FCMP	IRL	24	December	€ 4300	FCA NL/BE

Final Thoughts

In the ever-dramatic world of dairy, where butter fights to stay relevant, cheese seems to have lost its groove, and powders are puffing themselves up for attention, one thing is clear: the market is as fickle as ever. The liquids are still throwing a tight squeeze party, but even they can’t keep up the act for long. Meanwhile, the GDT gave us a little bullish sparkle, only for reality to remind us that not all that glitters is gold—especially when Mozzarella prices tumble faster than your post-holiday resolutions.

As for the near future? Expect surprises, side-eyes, and the occasional "what were they thinking?" move from market players. Just like a well-aged cheddar, patience and timing are key. Let’s hope the industry balances its enthusiasm with caution because if there’s one lesson from this week, it’s that the dairy market is a lot like life—unpredictable, a little cheesy, and best enjoyed with a little help from your friends at Get Fair Dairy.