More Irish Product & More Buyers

The past two trading days have, once again, been volatile. On Wednesday, butter took a notable step down, and powders and cheese weren’t far behind. Irish butter prices dropped below €7000/mt, with UK butter the cheapest on the block around €6800/mt, according to several partners. Lower cream and SMC prices pushed producers to adjust commodity offers downward as well. Via the Vesper platform, Irish butter changed hands at €7025/mt directly from producers, and SMP at €2300/mt—confirming that the heaviest pressure is currently coming out of Ireland. By Thursday, butter was trying to claw back some ground, though most trades we handled still came in between €7000 and €7200. Cheese? Offers are still edging down. But no bites from our side—our buyers are adjusting bids just as fast.

Tariffs, Trump, and Tensions

Zooming out, the US seems to be easing off the tariff gas pedal, and EU–US tensions have cooled a bit. But let’s not pop the champagne just yet. Given Team Trump’s stance, a comprehensive trade deal remains far from certain. We don’t see the EU rolling back dairy tariffs any time soon—and a “zero-zero” tariff arrangement would be highly bearish for EU dairy prices.

Meanwhile, the US is escalating its trade war with China, now slapping 145% import tariffs on Chinese goods. After yesterday’s rebound, stock markets are cooling again. As for the dollar—well, it’s behaving like it just drank a triple espresso. The USD/EUR rate has swung from 1.093 to 1.123. Honestly, it feels like FX swings have more influence on EU export competitiveness than a 10–20% tariff does.

Cream & SMC: Like Trump’s Mood Swings

The EU liquid market is matching Mr. Trump’s temperament: volatile, unpredictable, and occasionally dramatic. On Wednesday, cream and SMC markets took a hit. Western EU cream dipped around €8200/mt, with Eastern EU hearing whispers of €8050/mt. The UK took it even further—sub-€8000 levels, down to around €7600. SMC traded in the €1700–€1750/mt range. By Thursday, some life returned to the cream market, with Polish prices rebounding toward €8400/mt and possibly higher.

The Irish Dilemma

Thanks to those US import tariffs, we’ve been revisiting the butter export numbers to the US. Over the past five years, EU butter exports to the US hovered around 40–45kmt annually, with over half from Ireland. In 2024? That number exploded to 65kmt. Now, while Irish butter is objectively tastier than its US counterpart, we doubt American consumers suddenly doubled their EU butter cravings—especially when US butter is around €2000/mt cheaper.

So yes, it looks like Ireland shipped that extra 20kmt to the US last year in a pre-tariff panic. That volume won’t repeat in 2025, and might even eat into this year’s regular exports. In short, Ireland may need to find a new home for about 40kmt of butter. Data through February already shows a 50% drop in Irish butter exports to the US. The UK—historically the second-largest buyer—isn’t offering much relief either. UK milk production is up, cream and butter prices are cheaper than Irish equivalents, and now they’ve got access to New Zealand butter, too.

Irish Milk Output: Growing, But Let’s Keep Perspective

February production wasn’t impressive, but producers report that March and April are shaping up nicely. The weather’s been ideal, and optimism is high. Still, let’s keep things in perspective—strong year-on-year growth is coming off a weak 2024 base. So far, low opening stocks and poor milk output in 2024 have kept Irish sellers calm. But if milk picks up and exports remain sluggish, pressure may build. Will continental buyers be hungry enough to absorb the surplus? Germany and France aren’t showing strong milk growth, yet butter output hasn’t really suffered. In fact, butter production in both countries was up in January and still strong in February.

The weight is also being felt in SMP and cheese. Irish SMP via Vesper trades below Dutch and German indications, and cheddar pressure is largely UK- and Ireland-driven. To our Irish friends: Don’t wait too long. Selling between €6900 and €7000/mt right now may be a window you’ll miss later.

Butter: Buyers Back Below €7000

The butter market mirrored the broader volatility. Wednesday saw Irish butter drop to €6950/mt, UK even lower, and NL/DE/BE prices slipped toward €7100. Even producers quoted between €7125 and €7180 in Germany and Belgium, while Irish producer quotes dipped just under €7000. Interestingly, once we started reporting sub-€7000 trades, buyers reappeared. Go figure.

Producers initially panicked mid-week—worried whether they’d find buyers. But as soon as demand surfaced, they dusted off their old playbook: tap the brakes, slow the sales, aim higher. Will buyers chase prices back up? Or will sellers need to step back in?

Today’s Offers:

• 6 loads NL/DE/BE fresh/frozen April/May at €7200
• 6 loads Irish butter fresh/frozen FCA IE May–June at €7120
• 6 loads Irish butter fresh/frozen FCA IE Q3 at €7125
• 3 loads UK sweet cream April at €7950
• 2 loads Polish sweet cream at €7200
• 6 loads NL/DE/BE fresh/frozen Q3 at €7250

Cheese: Doubts, Doubts, Doubts

Cheese volatility takes a different form—prices inching up or down by a few cents, with buyers and sellers locked in a dance no one wants to lead. Conversations hint at growing demand concerns. Cheese demand overall is holding up, but pizza demand (a key consumer) is reportedly slowing. Despite seasonality and softer vibes across commodities, high WPC prices are still anchoring cheese production.

Current Offers:

• 6 trucks Mozzarella May–June at €4230
• 6 trucks Gouda May–June at €4375

Powders: Weak, With Limited Downside

The powder market keeps easing, slowly but surely. Same specs, same origins, lower every two weeks—by €20–30/mt. Internal EU demand? Stable to weak. Production? Still ahead of demand. Export outlook? Meh. And with the euro strengthening, don’t expect it to get easier. SMC continues to feel the heat—trading at €1700–€1750 FCA. With spare capacity on the towers, SMP production around €2300/mt is very feasible.

Recent Trades:

• LH for May at €2365 from DE/BE
• EU non-standard SMP (37% protein) at €2450 DAP NL

Despite all the bearish signals, we’re near the market bottom, so don’t expect anyone to sell short. Peak milk might still push spot loads below €2300/mt, but futures hedging is fading. The EEX curve has flattened, and CME prices are sliding, so even the opportunistic spot buyers may step back.

Today’s SMP Offers:

• 100mt Irish Codex MH BB, fresh, Apr/May ETS at €2350 FCA IE
• 75mt Lactalis (BE) Codex MH, Dec ’24 or fresher, €2360 FCA BE
• 118mt Dairygold Codex MH, Sept ’24+, €2360 FCA IE
• 85mt Tirlan Codex MH, Dec ’24+, €2360 FCA IE
• 150mt EU27 Codex MH, fresh, €2340 FCA NL/BE

And Bids:

• 100mt Arla LH, May/June, €2325 FCA DE
• 400mt Codex MH, West EU, no age limit, €2300 FCA
• 200mt non-standard SMP min 36%, BB or bags, Apr/May, €2400 DAP NL