As milk prices rise the dairy market weakens

Milk prices are once again seriously attempting to rise in April, after a sharp downgrade. However, support from the dairy market does not continue. The Global Dairy Trade also turned downward yesterday and recorded the largest decline since the end of 2025, although European exporters remain the cheapest supplier on the world market. With a decline of 3.4%, the average price fell back to $4,228 per ton. Milk fat in particular and, to a lesser extent, cheese were hit hard. Milk powders also fell. Butter price tumbles Butter fell by as much as 8.1% to $6,181 per ton. Particularly striking is the large price difference between New Zealand product from Fonterra and that of Belgian supplier Solarec, which also sells via the platform. Belgian butter is $1,705 per ton cheaper. This is related to the assumedly high butter stocks in northwestern Europe. In recent weeks, the DCA butter benchmark also fell back after an earlier Easter rebound. After four consecutive increases, the GDT price of mozzarella fell by 6.2% to $3,945 per ton. Only European product was traded. Cheddar fell by 3.1% to $4,766 per ton. This concerned exclusively New Zealand product. European cheddar is, incidentally, significantly cheaper on the physical market. Milk powder market has a ceiling Milk powder prices on the GDT show slight declines. Skimmed milk powder has risen by 50% since the turn of the year to the highest level since October 2022, but yesterday fell for the first time by 1.6% to $3,381 per ton. The market thus appears to be reaching a ceiling. European product is also significantly cheaper here than New Zealand product, which is favorable for the export position. Whole milk powder fell by 0.7% to $3,687 per ton and thus continues the downward trend. European product is, incidentally, a fraction more expensive here than New Zealand product. Rising milk prices Meanwhile, milk prices in the Netherlands are broadly rising this month, as a result of higher dairy prices earlier this year. After FrieslandCampina and A-ware, Lactalis Leerdammer has also increased the payout price. For May, however, further increases seem less certain. The physical European dairy market showed a weaker tone in the week before Easter, with slightly falling prices for butter, cheese and milk powder. This puts pressure on the raw material value of milk, as shown by the valorization tool of DCA Market Intelligence. The lower GDT result will probably weaken market sentiment further. Towards the seasonal peak in milk production, extra supply becomes available. At the same time, butter stocks remain high. Cheese is delivered relatively young and demand after Easter may weaken. The milk powder market is losing support from the oil price. Brent oil fell last night after the ceasefire in the Middle East by $15 to below $95 per barrel, although the market will probably remain volatile in the coming period. Target price of €40 The rising milk prices are currently disconnected from the underlying dairy market, which is actually showing signs of weakening. With declining GDT quotations, rising stocks and an approaching seasonal peak, further increases in May are uncertain. A price level of around €40 per 100 kilos is a plausible target price for base milk prices. This price level can also be paid by the factories. In doing so, European exporters retain their price advantage on the world market even after the downgrade of the GDT.