Markets Breathing Out Again

The first half of this week has been lively again, with most of the action centered on butter, while cheese and SMP saw only modest trade. More than 2,500 mt changed hands, showing the market is gathering pace as prices ease slightly again. This time, the pressure on fat isn’t coming from the liquids side but from producers clearing stocks and shifting focus toward Q1 sales, adding momentum in the forward months.

Liquids: Soft but Stabilizing

The liquid market doesn’t feel firm at all, though most of the downward correction seems to have run its course. Spot milk trades just below €0.30 in France and just above that level in Germany and the Netherlands. SMC remains weak at €1,000–1,200, while cream crept up a little to €6,050–6,200, slightly higher than last week — yet still too cheap relative to spot butter, cheese and smp.

Despite that, milk collection in France remains up 5% YoY, showing no slowdown. We expect the growth rate to ease somewhat as late-calving cows reach their 100-day peak, but even a slowdown won’t flip the balance — milk supply remains heavy, and the pressure continues to build.

Butter: More Stock, Older Stock

After a few weeks of sideways movement, butter prices broke lower again. With values now well below €5,000, the market appears to have lost its floor. Anyone following official quotations might think prices are still higher, but the German quote at €5,600 underlines the need for a better settlement system for both futures and physical contracts. Meanwhile, the French opted not to quote at all — again.

Recent trades included:

• NL/DE/BE: €4,900 for Nov–Dec–Jan; €5,050–5,150 for Q2
• Polish SC Butter (Q1): €4,900
• Irish Winter Lactic (Dec–Jan): €4,700–4,800

We’re seeing more producers returning to the market with older stock and remaining Q4 availability, which keeps downward pressure intact. Our earlier analysis still stands: once 2026 production starts building, pressure will only intensify. This week, more producers began shifting focus to Q1, targeting end users at €4,800–5,000 DAP Western EU.

We expect the market to open as follows:

• a bid for 132mt of Irish winterbutter at € 4550 FCA IE
• a bid for 132mt NL/DE/BE for Q1 at € 4850
• a bid for 132mt NL/DE/BE for Q2 at € 5000
• a bid for 132mt Irish Lactic for Q2 at € 4900
• a bid for 132mt NL/DE/BE for Q3 at € 5250

Cheese: Buyers Putting a Floor

After several weeks of intense trading, cheese activity has slowed down. More buyers are stepping in, and even without much forward-selling from producers, prices are holding steady. If values stay around current levels, we expect producers to favor cheese production over butter and SMP, which would eventually add pressure back onto the cheese market — but that shift takes time.

For now, we see a sideways market, with bids as follows:

• a bid for 330mt Gouda 48% Slicing for Feb-April at € 2900
• a bid for 220mt Frozen Mozzarella for Export at € 2900 Q1
• a bid for 66mt Gouda 48% Slicing for Q1 at € 2850

Powders: Expect More Product

International sentiment for SMP remains weak, and it’s hard to see what could turn the tide anytime soon. The GDT Pulse slipped again, though there’s a hint of upward momentum on the CME. Still, the cheapest SMC in the EU gives us the softest outlook — we expect production to outpace demand by a wide margin, and that excess volume will need a home.

Finding sellers willing to bet on lower prices further out remains difficult — there’s little conviction for a deeper drop. But finding buyers ready to absorb freshly produced stocks without further price concessions is equally challenging.

A telling example: today’s trade for Irish Codex SMP (FCA NL) at €1,975 for older product. That about sums up the tone — heavy supply, thin demand, and limited optimism.