Dairy markets took a bit of a downwards turn in Europe this week, with price drops for all key commodities. Butter took the biggest hit, dropping by €60/t, but then again at €7,295/t last week, the price drop is still less than 1%.

Whole milk powder (WMP) did drop by 1%, with €45/t coming off the price and it now sits at €4,205/t.

Meanwhile, skim milk powder (SMP) fell by €20/t to reach €2,315/t which is the lowest price since April 2025. Cheese was far more stable but still registered a decline, dropping by €10/t to reach €4,600/t for cheddar cheese.

According to market analysts, these price drops are nothing to be too worried about and follow the usual pattern of sluggish demand in the run up to holiday season for traders.

We are not long gone beyond peak milk supplies, so product is relatively plentiful.

It really won’t be until September before we get the full picture of the market and the impact of reduced milk supplies in northern Europe really becomes apparent.

A severe heatwave over recent weeks across France is likely to have a dampening effect on milk supplies in that country as cows will be under pressure.

France is already back in milk supply by 1% between January and May, so it’s likely to be back further if the weather stays hot. It’s the same story in Germany and the Netherlands. Production over the same period is back 2.75 and 1.95 respectively.

Even in Poland, supply is only up 0.8% for the first five months of 2025 compared to the same period in 2024.