What is driving the EU Mozzarella market adjustment?

Mozzarella prices in the EU are declining after a previous year marked by rapid growth, reflecting a broader normalization across the integrated cheese market. While production remains steady, shifting milk allocation toward higher-margin products highlights emerging structural constraints. Strong export growth continues, but regional divergence and currency pressures may challenge competitiveness in key markets.According to DCA Market Intelligence benchmarks, Mozzarella prices in the EU reached €4,030 per ton on July 31, marking a 0.24% increase compared to the same period in 2024. Throughout 2025, prices have remained significantly higher year-on-year, with increases of over 20% observed in March and April. Although weekly variations have become smaller in recent weeks, this follows a period of strong monthly growth earlier in the year and an upward price trend in the Mozzarella market. Price volatility has also been notably lower in 2025, with a coefficient of variation (CV) of 2.6%, indicating a relative stability in the market. Moreover, volatility is well below the 4.8% CV recorded in the previous year.Mozzarella prices also exhibit a high correlation with other DCA benchmarks such as Foil Cheese Gouda (0.93) and Cheddar Curd (0.90). This highlights the overall integration of the cheese sector, reacting similarly to market stimuli. Mozzarella generally maintains a lower price level than the other two.Cheese prices have been declining since week 11 of 2025, primarily due to a slowdown in demand, while production remains steady. After the milk peak, industry experts observed that several buyers had already secured their contracts earlier in the year, leading to quiet market activity and increasing competition among sellers. Fluctuating cheese productionCheese remains a top priority of the EU's dairy processing sector. The United States Department of Agriculture (USDA) projected the EU’s total cheese production at 10.8 million tons in 2025, representing an annual increase of 0.6%. Mozzarella has become a relevant commodity in the cheese segment, with a growth rate exceeding that of traditional hard cheeses, such as Emmental and Cheddar. Mozzarella’s relevance is driven by its standardized production process, suitability for ready-to-eat scenarios, and scalability for industrial-scale expansion.Finding detailed accounts of mozzarella production in the EU has proved challenging. Thus, the production of soft and pasta-filata cheese has been used as an indicator of its production. In Germany, the German Agricultural Information Center (BZL) reported that the Pasta Filata cheese production reached 484,412 tons in 2024, marking an increase of 4.9% compared to the previous year. Nonetheless, the cumulative production of pasta-filata totaled 197,638 tons as of May, a slight decrease of 3.0% over the previous year. While February and May saw annual declines, March saw a slight increase of 1.6%. This decline is consistent with an overall contraction in the EU cheese production earlier in the year, potentially due to an increased allocation of milk butter, limiting available milk for cheese production.Soft cheese production remains a core pillar at the birthplace of Mozzarella. In Italy, CLAL reported stability in the production of Mozzarella di Bufala Campana PDO, increasing slightly by 0.3% annually to 55,718 tons in 2024. Meanwhile, Italy’s fresh cheese production totaled 572,000 tons, marking an increase of 2.51% over the previous year. In turn, the production of medium-soft cheese, accounting for industrial mozzarella, declined by 16.7% to 40,000 tons. The combination of Protected Designation of Origin (PDO) products and industrial mozzarella cheese enables Italy to expand its product range across multiple regions, catering to both premium and mass-market segments.Meanwhile, mozzarella’s importance is increasing in Belgium. According to the Belgian Statistical Office, the country's mozzarella production totaled 87,000 tons in 2024, accounting for about 63% of the national total cheese production.Restricted mil supplyMozzarella supply is highly dependent on raw milk availability. The EU milk supply grew by % year-over-year to 144.5 million tons in 2024. This moderate rebound followed a period of stagnation and slight decline, indicating that despite structural challenges such as environmental regulations and rising input costs, the industry has demonstrated short-term resilience.However, the EU dairy sector faces deeper structural constraints. Significant increases in production costs, including labor, feed, and energy, have led to a continuous decline in the number of dairy farms in major milk-producing countries such as Germany, France, and the Netherlands. Moreover, the EU has tightened limits on nitrogen emissions, carbon neutrality requirements, and land use in member states such as the Netherlands and Germany, resulting in further restrictions on the herd size.Additionally, outbreaks of animal diseases such as bluetongue and foot-and-mouth disease disrupted livestock management and production scheduling. The outbreaks have also increased the uncertainty and customs clearance risks linked to cross-border dairy exports. These factors intertwine, placing significant pressure on EU milk production and challenging dairy production, which is highly dependent on milk supply.A robust international demandMozzarella exports are reported using the Harmonized System (HS) code 0406101, accounting for all fresh cheese. Between 2023 and 2024, extra-EU exports grew by 5.4% in volume and 10.3% in value, reaching 458,624 tons and €2.07 billion. Meanwhile, imports amounted to only 45,368 tons, underscoring the EU’s position as a net exporter. The UK stood out as the main destination for EU mozzarella exports, accounting for 43% of the total, followed by South Korea (10.2%), Japan (6.0%), and China (4.1%). The US accounted for just 3% of export volume. This limits the impact of the 15% export tariff agreed upon by the US and the EU in thehir most recent deal.Despite the strong trade relationships between the EU and both developed and emerging economies, exports to Southeast Asia and Oceania have declined significantly between 2023 and 2024.This could reflect both a loss of competitiveness of EU cheese in international markets. Moreover, demand was affected by an increased inflation and the reduction in purchasing power in the ASEAN region.Meanwhile, increases in the UK, the Dominican Republic, and the MENA region offset contractions in these regions, reflecting a strong demand from the UK, and growing demand fro mozarella in the Dominican Republic and the MENA region. Overall, the growth in mozzarella exports is supported by strong demand from the expanding global food service sector, where mozzarella is a staple in pizzas, pasta, and ready meals. Its versatility, especially in processed block form, makes it ideal for large-scale preparation. Rising demand for convenient, high-quality foods further boosts its popularity globally.The major mozzarella producers remained the largest exporters in the EU. Germany and Italy accounted for 17.4% and 23.9% of the EU’s fresh cheese export value, respectively, totaling 853,416 tons between them.Significant internal tradeWhile the internal EU trade far outweighs external exports, other fresh cheeses are included in the register, such as cagliata, quark, and ricotta. Internal EU exports totaled 1.74 million tons in 2024, valued at €6.75 billion.Internal exports grew by 8.1% in weight and 9.3% in value over the previous year, reflecting an additional 1.1% increase in export prices. Within Europe, the lasting popularity of Italian cuisine remains a central demand driver as well. And domestic retail markets are adapting to increasingly health-conscious consumers, with growing interest in reduced-fat, organic, and lactose-free mozzarella options. Producers are responding with product innovations like Arla’s light cheese products and Galbani’s low-fat mozzarella slices. New offerings, such as protein-enriched or low-sodium variants, are expanding mozzarella’s appeal, positioning it as a functional, nutritious ingredient beyond just a flavor enhancer. Improved accessibility through supermarkets, e-commerce, and direct-to-consumer channels is also increasing the market reach.Trade outlookDespite recent challenges in production, fresh cheese exports have remained strong in 20252. The Comext database report cumulative exports of 155,739 tons as of April, valued at over €716.24 million. Exports increase in warmer months across Europe, as tourism and outdoor dining expand food service activity. In 2025, prices have recently declined slightly due to slower demand, but the year could still benefit from seasonal gains.However, it is also expected that currency fluctuations affect exports, as the euro has appreciated against the dollar throughout the year. Between January and July, the exchange rate has declined from 0.98 to 0.85 euros per dollar. For the mozzarella, a stronger euro makes EU exports more expensive in dollar-based markets, dampening price competitiveness. {dataviewSnapshot(62_1753361173)}}Discussion and conclusionMozzarella prices in the EU are approaching year-on-year parity, with the gap shrinking rapidly and on the verge of turning negative. This trend mirrors the behavior observed in a highly integrated cheese segment, transitioning from rapid price growth last year to a cautious normalization.While the EU cheese production is projected to grow modestly, short-term declines of specific fresh and pasta-filata segments indicate a short-term increase in the allocation of milk toward more profitable products like butter. Additionally, this underscores a structural trend in the EU where processors respond rapidly to margin signals, particularly given the constraints on expanding milk output.Meanwhile, international demand for the fresh cheese segment remains robust. Fresh cheese exports saw solid growth in 2024 and accelerated in 2025, driven by seasonal factors such as summer tourism and rising food service demand.However, regional trade patterns are diverging. While Southeast Asia and Oceania show declining volumes due to reduced competitiveness and purchasing power, this is offset by growing demand in the UK, MENA, and the Dominican Republic.Overall, the EU mozzarella cheese market is offering mixed signals. Maintaining export momentum and competitiveness will depend on the industry’s ability to navigate shifting milk availability, dairy allocation, and exploit differentiation in international markets.Footnotes1: HS-040610 refers to “Fresh cheese unripened or uncured cheese, incl. whey cheese, and curd”2: Trade information is constantly updated, which could imply changes in trade data for 2025.References Eurostat, European Commission, CLAL, StatBel, FoodNavigator, the Executive Office of the US, and Korea Herald.