€50 milk price now on the horizon

While the meteorological autumn has begun, milk prices continue to move up out of a trough. After a difficult period in the first half of 2026 optimism in the dairy market is growing. €50 per 100 kilo is cautiously coming into view again. In June, the average milk price without premiums fell below €40, but since then the trend has turned upward. Initially the increase was slow and the recovery was fragile, but since this month milk prices at several processors have taken serious steps of around €1.50 per 100 kilo. Spot milk prices have also turned upward and are moreover rising faster than the payout prices. On the spot market, milk is once again being traded above the level of factory prices, and in southern Germany the DCA benchmark is again edging toward €50. Spot milk prices are often a precursor to payout prices and that has set the tone in the market. OptimismThe increasing optimism about the milk price did not come out of nowhere. At the end of July, ABN Amro already said it expected the critical milk price to come back into sight around the turn of the year. ABN is supported by ING, which in its latest market update expressed the expectation that the milk price can recover toward €50. There is, after all, reason for market recovery. The raw material value of milk has risen quite rapidly in recent weeks, according to calculations by DCA Market Intelligence. In particular, the combination of skimmed milk powder and butter is valuing surprisingly well, with a raw material value of just under €50 per 100 kilo. Skimmed milk powder is rising strongly The rising raw material value is not coming from butter - whose frozen stocks are still ample - as has been the case in recent months. Skimmed milk powder is now providing the most support. For ten weeks in a row, the market has been on the rise, with the DCA benchmark increasing by 25% to €3,230 per ton. This is the highest level since the autumn of 2022, when prices had risen sharply after the outbreak of the war in Ukraine. In the years that followed, the market struggled continuously, but now prices are suddenly rising sharply. The reasons for this are the protein trend, better-running exports to China, and tighter stocks than expected. A number of powder towers have been closed in Northwestern Europe in recent years and that probably plays a role as well. Cheese and whey powder are also valuing well. Cheese prices are currently rising fairly steadily, while whey powder has climbed to a record high. Solid foundation The market is moreover resting on a solid foundation, because milk supply in Europe is moving toward the seasonal low point. The decline may be reinforced in the coming months by the effects of the dry summer, which has left roughage supplies in some countries considerably behind. This plays a role especially in Eastern Europe, but also in the United Kingdom and Ireland. If demand remains well maintained toward winter, the cheese market can continue to strengthen. That can further raise the raw material value, which offers room for higher milk prices. Whether the already strongly increased milk powder and whey powder prices will keep rising depends on sentiment on the world market. European skimmed milk powder is meanwhile more expensive than American product due to the price recovery, and that is not favorable for exports. The critical milk price in the Netherlands is roughly between €45 and €47 per 100 kilo. This level seems within reach within a few months. With the current raw material values and a likely strengthening market, a milk price of €50 per 100 kilo comes back into view over a somewhat longer term. The milk price often follows the raw material value - with some delay - almost automatically.