Can the GDT pull EU prices up?

Yesterday was a relatively active day, with butter trading lower, thanks to weaker cream indications setting the tone. Cheese prices, meanwhile, continued their sideways shuffle—perhaps with a slightly firmer undertone—while powders have found solid ground to push higher. With most eyes fixed on the GDT, the market turned increasingly bullish in the latter half of the day. GDT prices jumped by 3.7% overall, leaving the bears scratching their heads, wondering what crucial detail they missed, while the bulls confidently climbed back into the saddle. Now, the real question: Can this firmer GDT sentiment lift EU dairy prices? Or will the EU stubbornly continue marching to the beat of its own drum?

GDT Results: Powders Take the Lead (Again)

Once again, powders dominated the GDT stage. Whole Milk Powder (WMP) prices rose by 4.1%, with EU product trading between €4,250 and €4,300, while NZ-origin WMP lagged slightly, hovering around €4,000. Skim Milk Powder (SMP) outperformed expectations, rising 4.7%, driving EU SMP prices up to €2,400 for German product, and up to €2,600 for Solarec. However, at €2,900, NZ SMP remains the standout performer. Given the current price spread, the EU should be well-positioned to take advantage of this competitive discount—assuming, of course, it plays its cards right.

Butter (+3.5%) and AMF (+2.4%) also performed better than anticipated. Strong demand for NZ product has now pushed its prices dangerously close to their highest levels since June last year (the NZ all-time high). Meanwhile, EU butter prices—never one to follow the herd—decided to buck the trend, slipping roughly €100 below the last tender’s prices. This aligns well with the softer tone we’ve been seeing across the EU market. Cheddar prices edged higher at GDT, but EU mozzarella prices remained flat, reinforcing what we’ve observed for some time now—a remarkably stable cheese market that keeps making attempts to climb higher but just can’t seem to hold its footing.

What’s Next?

With such a strong GDT, we should, in theory, expect a bullish momentum to spill over, especially with NZ heading out of peak production. Eyes will inevitably turn to the EU for additional supply. This should affect our powder market strongest.  However, the extent to which EU prices can capitalize on this will depend entirely on milk intake figures for the coming months and the internal demand landscape.

Butter: Sliding Lower (Again)

The EU butter market continued its downward slide yesterday, unfazed by the bullish GDT results. Despite the rally elsewhere, EU butter remained under pressure, dragged down by weaker cream prices yet again. The market is now left wondering what comes next. February trades largely landed between €7,025 and €7,200, while March prices dipped to €7,075 and, from what we’re hearing, possibly even lower. Q2 prices, in turn, slipped back to €6,900. EEX futures also showed a slow but steady decline.

If this week’s official quotations reflect what we’ve seen in the physical market, we should expect a sharp correction in NL/DE/FR quotations—potentially offering some much-needed breathing room for EEX futures to adjust downward, closer to levels we have been observing in the physical market for a few weeks allready.

We expect tot start the day with

• a bid for 4 trucks NL/DE/BE for Feb at € 7025
• a bid for 4 trucks NL.DE/BE for March at € 7050
• a bid for 6 trucks NL/DE.BE for Q2 at € 6825
• a bid for 6 trucks NL/DE/BE for Q34 t € 6925
• a bid for 6 trucks Polish Sweet Cream for March at € 6800
• a bid for 3 trucks Polish Sweet Cream for Q2 at € 6825

We expect to have sellers for

• 4 trucks NL/DE/BE for Feb at € 7100
• 4 trucks NL.DE/BE for March at € 7125
• 6 trucks NL/DE.BE for Q2 at € 6960
• 6 trucks NL/DE/BE for Q34 t € 7075
• 3 trucks Polish Sweet Cream for Q2 at € 6900
•  trucks Polish Sweet Cream for March at € 7050

Cheese: Ranging Up and Down (As Usual)

On the cheese front, we find ourselves in a situation that feels all too familiar—bids and offers continue their relentless back-and-forth dance. The market does feel a bit tighter today, so both our offers and bids have crept up by roughly €70 per metric ton compared to last week. However, since the bid-offer spread remains just as wide, the ever-frustrating task of matching demand with supply continues.

Sellers insist that the supply situation remains extremely tight—and at least for nearby positions, we’d have to agree. However, when it comes to Q2, sellers are reporting plenty of offers directly from producers, generally at par with current prices or with a slight premium. As a result, there’s little motivation for sellers to lower prices for prompt deliveries, just as buyers see no reason to pay a premium for forward positions. And so, the stalemate continues.

Our market remains roughly the same as earlier the week, see below.

• Gouda for Feb-march buyering intest around € 4300 and sellers between € 4360 and € 4400
• Edam for Feb, buyers aiming to buy € 4200, no sellers
• Mozzarella for Feb-march, sellers at € 40150, buyers at € 4000
• Gouda for Q2 sellers at € 4300 NL/DE/IRL, buyers NL/DE at € 4250
• Mozzarella for Q2 at € 4000 and sellers at € 4150

Powders: Bullish Thanks to GDT

With GDT prices all pointing north, we finally have a bullish powder market again. It’s been a while. That said, the persistent gap between German and broader EU product remains, though both seem to be following the same upward trajectory.

A strong SMP price coupled with an uptick in SWP prices should bring some relief to producers, especially those feeling the pinch from underwhelming cheese valuations and weaker butter prices. Who knows—if the market dynamics shift, perhaps powders can finally step up and support the struggling fat component of milk once more. Stranger things have happened.

We start the day with the following markets

• 200mt SWP, €1100 , fresh 25kg bags with export docs
• 100mt SMP from Limelco fresh production at  €2430
• 100mt SMP codex mh 6-8 month old (no german) with halal cert €2400 fca NL
• 300mt SMP max 12 months old EU27  €2350 fca
• 100mt SMP Yew Tree 100mt, €2350 ex UK op feb

We have offers

• ⁠200mt SMP from Limelco fresh production on €2500
• 125mt non-stand min 35% as is, 6 months remaining shelf life, west eu, 25kg €2450 dap nl
• 300mt codex mh west eu, max 6 months old €2475