European liquid dairy market holds at higher levels

European liquid dairy prices remained elevated in September, although developments became more mixed towards the end of the month. Raw milk stabilised at higher levels, while skimmed milk and SMC showed more volatility and SWC remained firm. Meanwhile, stronger intra-EU trade is helping absorb higher volumes as the seasonal decline in milk production approaches.DCA raw milk benchmarks remained mostly stable at higher levels. On September 24, prices stood at €44.50–€47 per 100 kilo, broadly unchanged from a month earlier. Compared with last year, prices were 50.8% higher in the Netherlands and Belgium, 28.2% higher in northern Germany and 32.4% higher in southern Germany. These strong annual gains also reflect a weaker comparison base, as prices were already declining at this time last year.Downstream liquids showed corrections. Skimmed milk declined to €26 per 100 kilo, down 13.3% over the past month, although still 108% above last year. SMC followed a similar pattern, reaching a 2026 high of €3,140 per ton before falling to €2,900, down 4.8% over the month. SWC was more stable, holding at €1,425 per ton, 2.5% above the previous month and 90% higher YoY.Milk supply remains high ahead of seasonal decline Milk collections remained above last year across most major producers through July. Germany reached 20.2 million tons (+6.4% YoY) and France 14.6 million tons (+2.2%), while production also increased in the Netherlands, Poland and Italy. The latest figures were more mixed, however, with France broadly unchanged YoY in July and Ireland down 2%, bringing its YTD decline to 1.5%. As European milk production moves into its seasonal decline, the market is therefore shifting from relatively comfortable summer availability towards expectations of lower volumes.Higher milk availability was also reflected in the skimmed stream, with SMP production remaining above last year through July. Output reached 248,000 tons in France (+4.5%) and 247,000 tons in Germany (+14.9%), while Poland produced 119,000 tons (+20.9%) and Ireland 121,000 tons (+12.8%). The latest developments were more mixed, however, with July output declining by 10% YoY in France and 13% in Ireland, while Germany and Poland remained respectively 10% and 17% above last year.Cheese-derived liquid whey availability also remained relatively high. Estimated volumes reached 11.8 million tons in Germany (+5% YoY) and 7.9 million tons in France (+1.4%) through July, while the Netherlands increased by 6% to 4.3 million tons. Italy was broadly stable at 5.3 million tons, suggesting that the raw material base for SWC has not contracted materially despite the considerably higher prices.Intra-EU trade expands despite mixed price developments Trade in liquid dairy products remained concentrated within the EU, reflecting logistical constraints. Through June, raw milk trade increased by 14% YoY to 4.14 million tons, led by Germany and Belgium, while the average export price declined by 21% to €48 per 100 kilo. Skimmed milk trade almost doubled to 688,000 tons (+97%), largely driven by France, where shipments more than tripled to 472,000 tons.Higher skimmed milk volumes came alongside lower prices, with the EU average falling by 52% to €16 per 100 kilo. France recorded the strongest decline among the main suppliers, with average prices falling 79% to €6 per 100 kilo, while the Netherlands moved in the opposite direction, with prices increasing by 20% to €75 per 100 kilo. SMC trade also increased by 33% to 402,000 tons, despite average values declining by 25% to €740 per ton. However, export prices started to recover in June reaching €880 per ton.SWC showed a firmer trend, with volumes increasing by 19% to 342,000 tons and average values by 21% to €400 per ton. By June, values reached €460 per ton, 55% above last year, amid strength in the broader protein market.Extra-EU trade remained considerably smaller. Raw milk exports increased by 6% to 411,000 tons, while skimmed milk rose by 38% to 39,188 tons. SMC moved in the opposite direction, declining by 4% to 27,632 tons. SMC export values averaged €1,540 per ton, more than double the €740 per ton recorded within the EU. Ireland stood out, with extra-EU exports more than doubling while averaging a considerably lower €810 per ton. SWC exports also declined by 10% to just 78 tons.Destination markets differ across the liquid complex Raw milk flows remained concentrated within Europe, with Germany receiving 1.54 million tons (+13% YoY), followed by the Netherlands at 584,000 tons and Belgium at 442,000 tons. Among extra-EU destinations, the UK was the largest market at 91,000 tons, followed by China at 62,000 tons, while shipments to the Philippines and Vietnam increased by 49% and 47%, respectively.Skimmed milk flows shifted strongly towards Spain, where volumes surged from 57,000 to 430,000 tons (+660%), making it by far the largest intra-EU destination. Italy followed at 89,000 tons (-32%), while China led extra-EU destinations at 22,000 tons (+52%). SMC demand was more diversified, led by Greece at 95,000 tons (+37%), while Polish purchases more than tripled to 59,000 tons. Libya remained the largest extra-EU destination at 8,155 tons.SWC trade was highly concentrated, with Germany and the Netherlands receiving 150,000 and 89,000 tons, respectively, together accounting for around 70% of intra-EU volumes.Conclusion and discussion The European liquid dairy market remains relatively firm, despite milk availability being higher than last year across most major producing countries. Stronger intra-EU trade is helping redistribute and absorb these volumes, while the approaching seasonal decline is shifting attention from current supply towards availability in the coming months. Elevated prices therefore do not necessarily point to an overall shortage of milk.Market sentiment also differs considerably from a year ago. Abundant milk and expectations of further price declines previously encouraged sellers to move volumes quickly. Today, spot activity is limited, with processors reluctant to sell below levels comparable with farm-gate milk prices and buyers showing little willingness to pay significant premiums. This more balanced positioning has contributed to greater stability in raw milk prices.Although the latest corrections do not necessarily indicate a weakening in fundamentals, milk production is already slowing in France, Ireland and the UK, while continued growth in Germany is partly offsetting these declines. Meanwhile, SMC has reacted more strongly to selling pressure and processing disruptions, while raw milk and SWC have been more stable.Demand also differs across the dairy complex. Milkfat markets remain relatively weak amid ample stocks, while cheese activity has recently slowed. In contrast, SMP and the protein complex continue to show greater strength, with SWC trade volumes increasing despite higher values. As milk availability declines seasonally, differences in relative valorisation will be increasingly relevant for allocation decisions.