Questionable Market that even AI can’t Analyze.

Last week, the dairy market traded mostly sideways. Still, we can’t help but lean slightly bearish, particularly on butter and cheese. While prices edged a bit lower, the more notable shift was in sentiment: more sellers are stepping in, while buyers are becoming scarce. But Let’s be honest—predicting where the dairy market is heading is becoming nearly impossible. The uncertainty is piling up fast:

• The FMD outbreak in Slovakia and Hungary continues to grow.
• German producers are increasingly worried about a potential bluetongue resurgence.
• Meanwhile, China retaliated against Trump’s tariffs, sending shockwaves through global stock markets.
• And in the Netherlands, drought conditions are already affecting production.

From here, the market could move in any direction. Our advice to our partners?

• Buyers: Cover your needs, but don’t overextend.
• Producers: Sell what you’re confident you’ll have—but avoid overselling.
• Traders: Keep risk exposure low. These markets are too unpredictable to play hero.

Expect a nervous, volatile period ahead, with a lot of last-minute decision-making.

AI Meets the Dairy Market: What ChatGPT Found

We asked ChatGPT to run a deep-dive analysis of the current dairy market and forecast price trends based on recent developments. After a 25-minute review of the latest available data, even AI had to admit: with so many overlapping external threats, there are simply too many possible scenarios that could shape the market’s direction.

Still, we selected a few key examples from its findings to illustrate how artificial intelligence views the market from a data-driven perspective. When asked to make a price prediction, compare it against last year’s price trends, and factor in the most imminent risk scenarios, ChatGPT came back with the following:

🧁 Liquid Dairy Market Insight: Cream & SMC – Q2 2025 Outlook

Historical Overview:
In 2024, cream prices soared above €10,000/ton, driven by tight fat supplies and surging demand. Spot raw milk followed closely, hitting €620/ton. SMC was in short supply due to weak milk availability and limited drying capacity.

Production Constraints:

• Bluetongue outbreaks in the Netherlands, Belgium, and Germany
• Poor forage and wet weather impacting yield
• Environmental limits (Ireland’s derogation cut)
• Processor bottlenecks in autumn 2024

Production Tailwinds (Spring 2025):

• Seasonal milk flush (April–May peak)
• Vaccination against bluetongue stabilising herds
• High milk prices boosting farm confidence

📈 Price Outlook – April, May, June 2025

• Cream
  • April: €7,800–8200/ton
  • May: €7,200–7,800/ton
  • June: ~€7,000/ton (risk of bottoming)
• SMC
  • April: €2000–2100/ton
  • May: mild easing expected
  • June: stabilisation near €1800–1900/ton

Summary: While prices are expected to soften through Q2, cream remains well above historic norms. Seasonality will bring relief, but any disruption – disease, weather, or export shocks – could reverse the trend quickly.

🧈 EU Butter Market Insight – Q2 2025 Outlook

Historical Overview:
2024 was a blockbuster year for EU butter. Prices surged from ~€5.50/kg in early spring to a record €8.10/kg in September, driven by a severe fat shortage, record-high cream prices, and low inventories. Dutch fresh butter hit its highest point since 2022, marking a ~40% YoY increase.

Production Constraints:

• Bluetongue reduced milk yields during peak season
• Processors struggled to secure enough cream for churning
• Low fat availability and strong global demand (retail + industrial)
• Buyers rushed to contract ahead of Q4 shortages

Production Tailwinds (Spring 2025):

• Seasonal milk flush in April–May will boost cream availability
• Vaccination efforts improving herd health
• Processors have replenished some stocks in Q1
• Demand stabilising after heavy forward contracting in late 2024

📉 Price Outlook – April, May, June 2025

• April: ~€7000/mt
• May: softening to €6400–6800/mt
• June: potentially down to €6000–6200/mt, barring new shocks

Summary: After a meteoric 2024, butter prices are now drifting lower — but not collapsing. Despite seasonally improving milk flows, low inventories and ongoing tightness are providing a price floor. Volatility remains a risk, especially with FMD still lurking in Eastern Europe.

🧀 EU Cheese Market Insight – Q2 2025 Outlook

Historical Overview:
In 2024, cheese prices in the EU showed remarkable resilience. Unlike SMP, both Gouda and mozzarella saw steady gains driven by solid demand and limited milk diversion into cheese due to fat and powder market tension. By March 2025, EU average Gouda stood at €446/100kg, up 14% YoY, while mozzarella hovered around €425/100kg, up 10%.

Production Constraints:

• Milk supply pressures due to bluetongue and weak forage quality
• Processors prioritising butter and SMP during late 2024 fat squeeze
• Seasonal cheese production slowed during Q3/Q4 tightness
• End-of-year spot sales kept inventories lean

Production Tailwinds (Spring 2025):

• Spring flush allows higher cheese throughput (especially mozzarella)
• Processors returning to cheese as fat markets cool
• Stable retail and foodservice demand across Europe
• Ongoing export potential to Asia and the Middle East

📈 Price Outlook – April, May, June 2025

• Gouda:
  • April: ~€4350–4450/mt
  • May: potential softening to €4250-€4350/mt
  • June: ~€4200–4300, depending on milk availability
• Mozzarella:
  • April: ~€4000–4100/mt
  • May: possible easing to €3800–4000
  • June: stabilisation around €3700–3900

Summary: Cheese markets remain stable but may ease slightly in Q2 2025 as milk supply improves. However, strong domestic and international demand – especially for mozzarella – should provide a price floor. A correction is likely, but not a collapse.

🥛 SMP Market Insight – Q2 2025 Outlook

Historical Overview:
The SMP market remained the underperformer among EU dairy commodities in 2024. While prices briefly lifted in late summer due to tight raw milk and concentrate supply, the broader trend remained flat. As of March 2025, food-grade SMP averaged €242/100kg – only slightly above year-ago levels.

Production Constraints:

• Low milk volumes during H2 2024 limited powder output

Production Tailwinds (Spring 2025):

• Spring flush will expand raw material supply
• Higher availability of SMC for drying
• Improved processor margins post-winter
• Stabilising energy and feed costs support output levels

📉 Price Outlook – April, May, June 2025

• April: ~€2400–2450/mt
• May: potential softening to €2300–2400
• June: risk of bottoming around €2250–2300 if global demand remains weak

Summary: SMP remains under pressure as global demand stays muted, particularly in Asia. Unless Chinese or African imports accelerate, European SMP prices are likely to drift sideways or slightly down. Expect Q2 to test the market’s floor – any sustained rally would need a demand-side trigger.

Conclusion:

In a market defined by uncertainty, clarity is in short supply. While data and analysis can help frame the conversation, the coming months will demand flexibility, realism, and a strong sense of timing from everyone involved in the dairy supply chain. Whether you're buying, selling, or simply trying to stay afloat—Q2 will test your nerve. Stay sharp, stay informed, and don’t mistake temporary calm for stability.