1) Basic data & market overview (EU)
EU Milk Market Observatory - short-term trend:
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Spot milk price (Italy) ~ 28.8 ct/kg (as of 25.01.2026).
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EU butter price: € 419/100 kg (-3.8% in the last 4 weeks).
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EU SMP price: € 210/100 kg (+1.9% in 4 weeks).
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EU WMP price: 312 €/100 kg (+1.5 % in 4 weeks).
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EU cheddar price: € 377/100 kg (-1.7 % in 4 weeks).
Commodity/product prices remain volatile with varying segment performance.
Brief commentary:
Milk and dairy product prices continue to move in a tight market environment, with slightly declining butter and cheddar prices, while SMP and WMP are moderately supported.
2) Prices & supply situation in detail
Butter
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Spot butter prices in Europe continued their downward trend, with a significant reduction. Currently, one market service reports a level around ~3,835 €/t - the lowest in several years.
Milk & raw milk prices
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In Germany, some dairy farm-gate prices are below 40 ct/kg - some regions are reporting ~30-35 ct/kg on the spot market.
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Spot milk prices remain low, reflecting continued supply pressure.
Cheese & Powder
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According to USDA weekly data for week 3/2026, prices for SMP and WMP are trending stable to slightly firm; SMP in particular upwards (price rally for certain productions).
Global Dairy Trade (GDT)
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Mixed signals from GDT auctions:
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Prices slightly up again overall after previously falling - a fragile global impulse.
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3) Supply and production trends
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European milk production continues to grow, albeit at a slower pace in some countries; e.g. France reports +1.8% in the week, Germany +5.6% year-on-year (weakest increase in 20 weeks).
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Milk deliveries in Germany significantly higher than in the previous year → high supply pressure puts pressure on prices (especially on the spot market)
🧠 4) Bullish (market-supporting) elements - CW 5/2026
| Bullish | Reason / Indication |
|---|---|
| 🌍 GDT price rally continues slightly | |
| 📈 SMP and WMP tend to be stable/slightly up | |
| 🧀 Parts of the cheese prices slightly weak |
🔻 5) Bearish (market-impacting) elements - week 5/2026
| Bearish | Reason / Indication |
|---|---|
| 📉 Butter prices continue to fall | |
| 🥛 Low raw milk and farm-gate prices | |
| 🐄 O versupply continues to depress the market | |
| 📉 Production costs above farm-gate prices | |
| 🧈 European butter prices under pressure in comparison |
📌 6) Market assessment & outlook
Short term (next 1-2 weeks)
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Price volatility remains high, spot prices remain weak, especially in the milk and fat segment
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Powder segments (SMP/WMP) could provide short-term support, especially if global demand (GDT) stabilizes
Medium-term
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Without substantial demand stimuli (e.g. export offensives, seasonal consumption), prices will remain under pressure as long as supply remains high.
Structural challenges
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Production costs above payment prices → Margins for producers are narrow to negative.
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Global competition and currency fluctuations weigh on exports.
📌 Plain language for market players
✔️ Producers: Pressure on farm-gate prices remains; cost management & contract strategies are important.
✔️ Dairies: Fat segment remains critical; powder/proteins could be stabilizing segments.
✔️ Traders/exporters: Watch GDT prices closely - a slight change in trend may be starting to emerge worldwide.
ZMP Live Expert Opinion
In the short term
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Price volatility remains high, spot prices remain weak, especially in the milk and fat segment.
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Powder segments (SMP/WMP) could provide short-term support, especially if global demand (GDT) stabilizes.
Medium-term
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Without substantial demand stimuli (e.g. export offensives, seasonal consumption), prices will remain under pressure as long as supply remains high.
Structural challenges
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Producer costs above farm-gate prices → Margins for producers are narrow to negative.
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Global competition and currency fluctuations put pressure on exports.
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