Milk production in Germany increased again at the end of February in line with the seasonal trend. According to calculations by the Central Milk Market Reporting (ZMB), the volume of milk supplied in the 9th calendar week was 1.0% higher than in the previous week. Although the previous year's level has not yet been reached, the gap has narrowed to 2.0%. One reason for this is that the seasonal increase in the previous year paused briefly at this time. Overall, German dairies processed around 2.2% less milk in the first two months of the year than in the same period of the previous year.
The market for food-grade skimmed milk powder remained stable in mid-March, with manufacturers receiving isolated inquiries, mainly from European food companies. The rising euro exchange rate against the US dollar affected the competitiveness of European suppliers, while prices in the USA fell. There was sufficient supply, and higher milk production and increasing demand for milk fat resulted in more skimmed milk concentrate, which briefly lowered prices. On March 12, 2025, the price for skimmed milk powder was between EUR 2,410 and EUR 2,550 per tonne. The market for feed-grade skimmed milk powder was quiet as demand from the industry was low.
The market for semi-hard cheese remained buoyant in mid-March. Producers recorded strong demand from retailers, restaurants and the food industry. In the coming weeks, the Easter business is likely to provide an additional boost to sales within Europe. The export business also developed positively: delivery volumes within the EU were in line with the seasonal average, and further orders were received from southern European vacation regions. Demand from non-EU countries remained stable, although the outbreak of foot-and-mouth disease in Hungary caused uncertainty in some cases. Due to the high sales figures, stock levels remained low and cheese was still being delivered at an early stage of ripeness. Many producers had already exhausted their capacities, making it almost impossible to meet last-minute requests.
In the middle of March, sales of moulded butter remained high, boosted by seasonal orders from food retailers and lower consumer prices. However, the prices for molded butter were reduced to between EUR 7.40 and 7.80 per kilogram. At the same time, milk volumes increased only slowly and the selling prices of dairies remained stable. The block butter market also showed a stable development, supported by high demand and low milk volumes. Prices rose due to demand, particularly for cream, and were quoted at EUR 7.35 to 7.55 per kilogram on the Kempten exchange on March 12. Uncertainties regarding milk production in the EU due to illnesses could influence the price trend. Prices continued to rise on the European Energy Exchange, but the trading volume declined slightly.
ZMP Live Expert Opinion
Milk production has increased slightly again due to seasonal factors, but remains below the previous year's figures and is thus keeping manufacturers' tight stocks constant. The market for skimmed milk powder and molded butter experienced a stable or slightly declining price trend, while the semi-hard cheese market benefited from strong demand from the food service and retail sectors. The block butter market remained stable, supported by high demand and the still limited milk supply. Overall, although the submarkets are still characterized by seasonal fluctuations, they continue to benefit from a stable and in some cases positive trend.
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