EU cheese expanding trade faces price recovery

EU cheese production and trade expanded in the first half of 2026, supported by higher milk availability and improved price competitiveness. Cheddar, Gouda, Mozzarella and Emmentaler played a key role in absorbing additional supply, although their export performance differed considerably. With EU cheese prices now recovering, maintaining competitiveness will be key to demand in international destinations.The EU cheese market remained on a recovery path through summer, despite a slight cooldown in the last weeks. DCA benchmarks for Cheddar and Gouda recorded the strongest monthly increases. Gouda closed at €3,555 on September 17, up 5% from the previous month, while Cheddar Curd and Mild increased by 7.3% and 6.8% to €3,655 and €3,700, respectively.Emmentaler recorded more moderate increases of 2.8%, while Mozzarella declined by 4.5%. A notable change occurred in week 38, when benchmarks started to express annual gains. Mozzarella benchmarks have risen by 7% compared to the previous year and Gouda by 5.5%, while Cheddar and Emmentaler remain between 6.6% and 9.1% lower.Internationally, Cheddar prices diverged. US prices declined by 1.6% month-over-month to $3,518 in September on average, while New Zealand GDT prices increased by 1.5% to $3,789. In Mozzarella, GDT prices increased slightly by 0.1% to $4,118 (€3,551), slightly below EU levels.On a dry-matter basis, Mozzarella continued to generate the highest value, averaging €7,177 per ton of DM in September, 18.5% to 19.4% above Cheddar, 18.1% above Gouda and 4.2% above Emmentaler.International tradeEU cheese exports totaled 728,189 tons in the first half of 2026, valued at €4.28 billion. Lower prices supported a 5.8% increase in export volumes, although export value declined by 3.8%. Germany (+13.2%), Ireland (+18.5%) and Poland (+16.4%) provided the main increases in supply.Imports increased faster, up 8.7% to 106,079 tons, while average import prices declined by 12.4%, increasing competition in price-sensitive segments. Nevertheless, incoming volumes remained concentrated among regional suppliers, particularly the United Kingdom, Switzerland and Norway.EU exports Cheddar, Emmentaler, Mozzarella and Gouda totaled 255,913 tons as of June, 35.1% of EU cheese export volumes, while representing 24.5% of export value through June. Their average export prices declined by 18.4% year-over-year, compared with 9% for cheese overall. This improved their competitiveness: of the additional 36,637 tons of EU cheese exports, 27,673 tons came from these four commodities.Gouda exports increased by 16.8% to 59,155 tons, supported primarily by Germany (+39.1%), with Japan (+26.9%) and Chile (+60.5%) absorbing much of the additional supply. Cheddar recorded the strongest proportional growth, rising 20.1% to 57,984 tons. Ireland accounted for 88.7% of EU Cheddar exports, while shipments to Japan increased by 155.9%.Mozzarella remained the largest of the four categories at 117,475 tons and €463.79 million. A 17.6% decline in export prices was not offset by increasing export volumes, resulting in an 11.8% decline in export value. Additional volumes came particularly from Poland, Ireland and Denmark and were mainly directed towards the UK and Japan.Emmentaler recorded the lowest volume growth, increasing by 3.3% to 11,354 tons, while export value declined by 4.9% to €68.25 million. Growth was supported by the Netherlands, Denmark and Poland, while shipments from several traditional producers declined.Internal trade and productionIntra-EU cheese totaled 2.11 million tons through May, a 4.5% annual increase representing an additional 90,750 tons of cheese circulating within the EU. Growth was strongest in Mozzarella (+14.2%) and Cheddar (+7.8%), followed by Emmentaler (+6.2%) and Gouda (+1.5%).EU cheese production increased by 3.5% to 5.2 million tons, slightly ahead of the 3.1% increase in milk collections, as cheese remained an important destination for additional milk. Germany (+5.1%), the Netherlands (+6.3%), Poland (+4.9%) and Austria (+14%) provided important contributions to production growth. Although Irish production figures are not yet available, the strong increase in exports suggests that output also expanded substantially.Discussion and conclusionsThe EU cheese market in 2026 has been characterized by expanding production, lower prices and stronger trade activity. Higher milk availability supported cheese production, while the price correction since late 2025 improved the competitiveness of EU cheese and facilitated the absorption of additional supply through both internal and international markets.This adjustment has been particularly evident for Cheddar, Gouda, Mozzarella and Emmentaler. Their export prices declined considerably more than those of cheese overall, while the four commodities accounted for around three-quarters of the additional EU cheese exports in the first half of the year. Commodity cheeses have therefore played a disproportionate role in absorbing the increase in EU supply.However, the response to lower prices differed substantially between products. Cheddar and Gouda showed the strongest export response, although growth became increasingly concentrated in specific suppliers and destinations, particularly Ireland and Japan for Cheddar and Germany, Japan and Chile for Gouda.Mozzarella presented a different dynamic. Its increase in export volumes was insufficient to compensate for the sharp decline in prices, resulting in the largest drop in export value among the four commodities. This occurred despite Mozzarella maintaining the highest value per ton of dry matter, highlighting that a higher value relative to milk solids does not necessarily correspond with a greater capacity to absorb additional production through exports. Emmentaler, meanwhile, recorded limited volume growth but comparatively resilient export value.Overall, lower prices have been an important mechanism for absorbing growing EU cheese supply, but improved price competitiveness has not translated uniformly into export growth. Cheddar and Gouda have shown the strongest volume response, while Mozzarella has maintained a high value relative to dry matter but faced greater pressure on export revenues, and Emmentaler has remained comparatively stable but less dynamic.The recent recovery in EU prices could now challenge this balance. This is particularly relevant for Cheddar, where New Zealand currently holds a price advantage. If EU production remains elevated while recovering prices reduces international competitiveness, stronger internal demand or renewed price pressure may be required to absorb the available supply. Furthermore, additional volumes might not react on cheese prices alone but might be influenced by the increasing demand for high protein ingredients. In that sense, whey protein is starting to become a driving factor of production, supporting the valorization and production of cheese.