Plummeting milk fat is driving up the dairy market

The price drops aren't limited to milk fat. The price for skimmed milk concentrate also fell, albeit by "only" 4,1% to €1.400 per tonne.

Prices for raw milk are also plummeting, particularly in northern and central Germany. There, spot milk is sometimes offered for well below 25 cents.

Resistance room seems broken
This week's DCA cream price drops to €5.325 per tonne, but plenty of cream lots traded at even lower prices, reaching levels of around €5.000 per tonne.

These price drops are enormous, especially since cream has always been the product that has offered the most resistance to all the price pressure this year.

The butter price has fallen to €4.475, but even here trading has been at even lower levels, partly due to extra cheap supply from Poland, Ireland and also the US.

Several parties expect the butter price to drop below a 4 by the end of the year. It's a forecast that dairy farmers aren't happy about, but production has been exceptionally high this year thanks to numerous favorable circumstances, resulting in a market for suppliers.

Short and long term cheese market
The cheese market is also feeling a bit weaker, but prices for products with short-term delivery are still holding up reasonably well. Things are getting tougher for products due for delivery after New Year's Eve, and prices for these are under further pressure. Incidentally, many producers have already sold a fair amount of product for the first quarter of the new year, which is understandable. Companies also need some certainty, even if it's not what they'd like.

The picture on the powder market is mixed. Prices for milk powders continue to weaken slightly. This is more evident for whole milk powder than for skim milk powder. However, even though prices are quite weak, a significant amount of milk powder has been exported in recent weeks, which is helping to clear some of the accumulated inventory. 

For a long time, virtually nothing could be exported because Europe was too expensive for the global market. This is no longer the case; the price of the improved competitiveness is that little or nothing is earned from exports. However, keeping the powder in stock is also expensive.

Expensive WPCs 
In contrast, the market for whey powders looks much more positive. This is mainly due to the continued strong demand for high WPCs, which are an essential ingredient in the many "hi-protein" drinks and dairy products sold en masse in Western countries. The new price for WPC-80 for the first quarter of 2026 is between €12.000 and €13.000 per tonne, depending on the exact quality, and there is good demand from both Europe and the US.

This protein hunger also means that regular (flat) whey powders are rising in price, if only because less and less of them are being produced and stocks are therefore shrinking.

At many dairy companies, the high whey protein content is even the ingredient that makes cheese production somewhat profitable, because with current cheese prices alone, it is very difficult, if not impossible, to pay milk prices of much more than €40 per 100 kilos.