Cheddar prices drop amid a rebalancing trade

Cheddar cheese prices have reached their lowest levels since 2023, as the market faces the combined pressure of abundant milk supplies and subdued demand. Ireland and the UK remain the backbone of the EU's Cheddar balance, sustaining exports and internal supply, while trade patterns are gradually diversifying with new players. Against this backdrop, the market is undergoing a broader phase of adjustment. This report examines these developments in detail, analysing price trends, trade flows, and the structural forces shaping the Cheddar market in 2025.According to DCA Market Intelligence, Cheddar benchmarks continued their decline through week 41. Curd closed at €3,625 and Mild at €3,755 on October 9. From week 27, Cheddar Curd decreased by 20% and Mild by 18.4% in under three months, reaching their lowest levels since early 2023. Year-on-year, values are down 28% for Curd and 26.7% for Mild. Curd and Mild continued to mirror their price development, with a correlation of 99.6%. The usual premium of Mild over Curd has stayed stable between €100 and €120 per ton, showing that both products have fallen at a similar pace. Cheddar also remains closely aligned with Gouda and Edam, with correlations above 92%, indicating a unified semi-hard cheese market. Since July 2025, however, Cheddar has proven more resilience, while prices for Gouda and Edam decreased by 26% instead. Global Cheddar markets enter a downward phaseDCA Cheddar benchmarks rose 28% between January and September 2024, with Mild and Curd varieties peaking near €5,300 before easing through 2025. The US 40-pound block averaged roughly €625 lower, giving American producers a price advantage, though specifications and quality grades differ. Both markets moved largely in sync, with correlations above 70%. New Zealand's Cheddar showed a weaker correlation (58%) reflecting its seasonal, pasture-based production. Output peaked later in the year, creating a lagged price cycle; NZ Cheddar reached €4,868 in May 2025, underscoring its role as a swing exporter influenced by global demand and local production cycles. Overall, Cheddar values have softened across all regions, with US prices near €3,200 and New Zealand around €4,100, signalling a broad global downturn and narrowing regional gaps. Supply Dynamics As no specific data on Cheddar production were available for EU members, trade data¹ were used as the main indicator of supply dynamics, capturing both intra and extra-EU movements. While this approach reflects overall supply flows, it also masks differences between countries that produce Cheddar and those that trade or process it. In production terms, Ireland and the United Kingdom (UK) remain anchoring both domestic supply and export activity. Smaller-scale production exists in Belgium (Milcobel), Estonia (E-Piim), Poland (Mlekovita and Mlekpol), Sweden (Arla's Kvibille Mejeri), and Romania (Prodlacta). By contrast, the Netherlands, Denmark, Germany, France, and Spain feature prominently in trade data but function largely as processing or redistribution hubs. This distinction is important, as re-exports can overstate apparent supply from these markets. Trade contracts within the blocWithin the EU bloc, Cheddar trade eased throughout 2025. As of July, the internal EU exports fell by 15.8% to 108,913 tons. Ireland led these flows with 45,494 tons, followed by the Netherlands (20,664 tons) and France (15,869 tons).Germany remained the destination within the block (39,584 tons). Other major hubs were the Netherlands (16,864 tons), Spain (15,856 tons), France (8,275 tons), and Belgium (6,369 tons). The Netherlands and France recorded modest trade surpluses, reflecting their role as re-exporters. While Germany, Spain, and Belgium posted clear trade deficits.Trade activity easedCheddar trade activity has eased compared with last year, as extra-EU exports declined by 1% and imports by 1.8%, indicating subdued but balanced trade with external partners. Nonetheless, the EU remained a modest net exporter of Cheddar in 2025, recording an extra-EU trade surplus of 18,784 tons. In parallel, year-to-date (YTD) Cheddar exports reached 58,849 tons (€302 million) as of July, remaining stable compared with 59,414 tons in the same period of 2024. Ireland dominated, accounting for 90% of bloc's exports. In contrast, other major exporters such as the Netherlands, Denmark, France, Poland, and Germany all posted negative trade balances. Exports were primarily directed to the UK, accounting for 57% of total volumes. Other markets included Algeria, Libya, Japan, and the United States (US), which represented 22% of the exports.Ireland drives Cheddar exportsIreland remains a global Cheddar exporter, both to the EU and the global markets. YTD July, Ireland exported 98,714 tons of Cheddar, valued at €489 million. This reflected an 8% increase compared to the previous year. The main drives of the export's growth were increased shipments to the UK (+25%), the Netherlands (27%), and Spain (35%). While production data for 2025 is not yet available, total cheese output reached 271,200 tons in 2024 (-5% year-over-year). Despite this modest decline, Cheddar exports continued to grow, underlining the country's export orientation. Demand DynamicsCheddar demand remains steady, sustained by its versatility across foodservice and household use. Although harmonized EU data on Cheddar-specific sales are not available, import trends provide a reliable proxy, indicating a gradually evolving trade landscape. EU sourcing patterns realignDemand within the bloc eased, as the EU market rebalanced their provision of Cheddar. The Netherlands provides a clear example of how import patterns are being rebalanced. As of July, its intra-EU imports fell 18%, while extra-EU imports rose 85% to 7,049 tons. With New Zealand overtaking the UK as the main supplier, accounting for 67% of imports against the UK's 27%.Ireland moved in the opposite direction. Its extra-EU imports fell 48% to 3,920 tons, while intra-EU imports rose 23%, reinforcing its shift toward self-sufficiency. Meanwhile, Germany, France, and Belgium, the EU's largest Cheddar buyers, cut imports from both inside and outside the bloc. Germany's intra-EU purchases fell 14%, France's 12%, and Belgium's 17%. Spain, however, moved against the trend: its intra-EU imports rose to 15,856 tons, and extra-EU imports surged in 68% to 1,829 tons. Supply diversification marked the international marketAs of July, the bloc imports contracted by 1.8% compared to the previous year to 40,065 tons. Most of these imports were directed towards France (18,451 tons), the Netherlands (7,049 tons) and Denmark (4,183 tons). The UK sourced 87% of the imports, remaining the EU's main external partner.Firm demand in traditional markets as regional trends divergeThe UK remained the main destination for EU Cheddar, with cumulative exports totalling 33,429 tons (+21%) as of July. In North Africa, exports to Algeria dropped by 44%, while volumes to Libya rose by 76%, supported by rising incomes and the spread of Western-style diets. In Asia, Japan remained one of the few markets where EU suppliers compete directly with New Zealand and the US. Exports to the country fell by 50%, reflecting stronger competition and softer demain the region. Meanwhile, shipments to the US increased by 71% from last year. Given the EU Cheddar price premium, this rise underscores consumers' preference in terms of flavour, texture, and labelling. Discussion and ConclusionsThe EU Cheddar market in 2025 reflects a phase of adjustment rather than structural change. Supply remains stable, anchored by Ireland and the UK, while New Zealand has gained modest ground under the EU–New Zealand Free Trade Agreement, in force since May 2024. The deal expanded duty-free quotas and eased tariffs, allowing limited but steady inflows from New Zealand. Still, the bloc's Cheddar balance continues to hinge on cross-Channel trade rather than broader global sourcing. On the demand side, trade flows point to reconfiguration and a mild contraction. The Netherlands and Ireland adjusted sourcing patterns to maintain balance, while others reduced purchases amid high inventories. Externally, demand stayed firm in mature markets like the UK and the US. While results in North Africa and Asia were mixed as stronger sales to Libya offset weaker demand in Algeria and Japan.The fall in prices is primarily driven by broader dairy market dynamics, intead of structural shifts in supply or demand. Exceptionally high milk production across the EU and other major regions has left processors with limited outlets beyond butter and cheese, creating downward pressure across most dairy commodities. Cheddar cheese has followed this trend, and moderate demand has offered little relief, reinforcing the overall market correction.While the EU market remains closely integrated across Cheddar, Gouda, and Edam, Cheddar prices have shown slightly greater resilience. Internationally, prices in Europe, the US, and New Zealand have softened in parallel, though trade data² show these producers largely serve distinct regional markets: New Zealand focuses on Asia-Pacific, the US on North America, and Ireland and the wider EU on intra-European trade and the UK. Beyond Japan as a shared destination, direct competition among exporters is limited, and prices mainly align through shared exposure to milk cycles and global benchmarks. Overall, the EU Cheddar market remains firmly grounded in well-established production in Ireland and the UK, supported by gradual diversification across continental Europe. Trade integration continues to ensure smooth market functioning, while New Zealand's growing participation mainly broadens sourcing rather than disrupting supply. Ample milk availability has added downward pressure on prices, yet this reflects cyclical abundance rather than structural imbalance. Demand is soft but resilient, adjusting to high inventories and broader dairy corrections rather than a loss of consumer interest. Together, these factors depict a mature market experiencing cyclical weakness but underpinned by solid fundamentals.Footnotes¹ Cheddar trade is reported in the Harmonized System (HS) through the code 04069021 - Cheddar (excl. grated or powdered and for processing).² Based on extra- and intra-trade flows under HS code 040690 (which includes Cheddar among other cheese varieties).