Milch News, 13/Sep/2025

Preliminary analysis as at the beginning of September 2025

Initial situation: Sentiment tilts slightly - price peak possibly reached

At the beginning of September, the EU dairy markets are showing the first signs of fatigue after months of strong prices. Spot prices for both butter and cheddar cheese have recently fallen noticeably. At the same time, raw milk prices are remaining at a high level, while the futures markets are already moving cautiously downwards.

This points to a discrete market turnaround: While the fundamentals (volumes, production, stocks) are still partly supportive, the willingness to buy is decreasing on the buyer side. The mood is not changing abruptly, but noticeably.

1. raw milk prices: Still stable - but under observation

• According to the MMO, the EU-wide raw milk price is around 55.8 ct/kg - a comfortable level for producers.

• However, the spot markets for butter and cheese - which are directly influenced by raw milk volumes - are declining.

Summary:
Long-term contracts are still taking effect and supporting the price level. However, as soon as stocks increase noticeably or exports decline, the price of raw milk is likely to come under pressure. Dairies could be forced to review payout prices - the first signs of a drop could already become apparent in October.

2 Butter: Spot price decline signals saturation of demand

• The butter price falls by -6.9% in a four-week comparison - from over €700/100 kg to around €664/100 kg.

• Butter contracts are also quoted significantly lower on the EEX futures market: for later delivery months (Nov25-Feb26) only at €5,500-6,200/t.

Summary:
After the spring rally, the butter market seems to have passed its peak. Demand, for example from the bakery and food service industry, is flattening out seasonally. At the same time, increased production in the EU is putting pressure on stocks.

For dairies, this means that those who sold well in the first half of the year were able to profit - currently, strategic calculations need to be made as to whether quantities should be stored or sold at falling prices.

3. cheese market: Cheddar weakens - export markets wobble

• The cheddar price fell slightly to €444/100 kg (-1.6% in a four-week comparison).

• According to national sources, other cheese products such as Gouda and Emmental are also showing increasing price pressure.

• International: UK and US markets are buying less - exporters have to make higher margin concessions.

Summary:
The segment was a stabilizer for the dairy market for many months, but is now becoming a potential weak point. If the export slump (e.g. towards the UK, Asia) deepens, this could put pressure on the utilization of raw materials in dairies. Specialty cheeses or regions with a strong focus on cheese (e.g. Allgäu, France, Ireland) in particular could face headwinds in the medium term.

4. futures signals: the market expects prices to fall

• Butter futures (EEX): Only €5,500-6,200/t → well below previous settlement prices of >€7,000/t.

• SMP futures stabilize at 2,293-2,311 €/t, but without impulses.

Summary:
Market participants are already pricing in lower prices - both for physical offtake and in derivatives markets. This speaks for a widespread expectation: the price plateau has been reached.
For butter in particular, the gap between spot and future prices is a clear signal of falling trends.

📌 Conclusion & outlook: Transition to a price correction likely