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The fat market remained relatively firm throughout October, though some volatility in prices has been noted, including different market outlooks. Butter prices in Belgium, Germany, and the Netherlands currently hover around €7,700/MT EXW for Q4, and 7500 or Q1, slightly below the highs of previous months, but still reflecting the ongoing tight supply situation across the European Union.

In Ireland, butter production remains constrained although a small uptick to a -5.5 % year-over-year, continues to add pressure to the EU market. However, France reported slight increases in production levels, and Poland has also seen an increase in output although it valorizes more for them to sell the cream, so there is a chance that the production of butter slows down even more.

Demand for cream remains firm, with almost no forward buying interest it becomes truly a spot-driven business. The interesting part is that the prices for Anhydrous Milk Fat (AMF) are slightly decreasing. Potentially because the market players can wait a bit longer than with cream. With cream prices rising sharply, reaching up to €10,000/MT FCA in the Netherlands. The tightening supply of fats has led to increased competition with cheese for milk valorization, keeping both markets under pressure. Cheese prices have remained strong, matching butter’s price trajectory, which further intensifies the competition for raw milk.

The start of Q4 showed that the fat market is increasing and also expected to increase further, with limited supply continuing to support elevated prices. However, the market may see some corrections if prices become unsustainable, as high prices often lead to demand adjustments.

Bdairy Market Outlook: Slightly bullish

In October, the Whole Milk Powder (WMP) market tightened slightly, largely due to reduced availability and short-term demand from the chocolate industry for Q4. While supply shortages persist, particularly in Ireland where production continues to decline, WMP prices in the European Union have stayed neutral, ranging from €4,150/MT to €4,250/MT EXW, showing a modest increase compared to September.

Export demand has slowed, especially from Africa, as many buyers have already finalized their Q4 purchasing. In contrast, Chinese Full Cream Milk Powder (FCMP) remains heavily discounted but is finding its production capacity and is also being actively purchased by partners in the Middle East, offering an alternative to higher-priced WMP.

Looking ahead, the WMP market appears balanced, though the elevated price levels are proving challenging for some buyers. It seems the market may have found an elevated floor, and we are now seeing a period of price stabilization as supply and demand come into equilibrium.

Bdairy Market Outlook: Neutral

In October, Sweet Whey Powder (SWP) prices remained firm, driven by strong demand from China and Southeast Asia. Buyers continued to secure Q4 shipments at prices much higher than anticipated. A key driver behind this trend is the sustained demand for high-protein products such as WPC80 and WPI, which has diverted whey concentrate away from SWP production. Prices for WPC and WPI are nearing historical highs, further limiting the availability of concentrate for SWP.

In Europe, food-grade SWP prices range between €970 and €1,150/MT EXW, depending on the brand. Offers from Ireland and Poland, both typically major whey suppliers, are scarce and come at a premium. Meanwhile, feed demand remains strong but stable, with buyers paying between €920 and €960/MT DAP NL.

Concentrate prices have also increased, surpassing €700/MT EXW, with some reports indicating trades as high as €750/MT EXW. This suggests that powder prices are likely to remain firm in the near term. U.S. availability of SWP remains tight, though EU products continue to hold a competitive advantage in global markets.

Overall, the outlook for SWP remains strong, though the improving cheese market may lead to increased concentrate availability.

Market Outlook: Neutral/ Slightly bullish

In October, lactose prices saw an easing moment on the market. With especially different geographical interests in the product. The use of lactose for standardization has been keeping the uptick in lactose prices. Especially in the export market where a higher supply of milk showed.

In the U.S., lactose production has improved slightly, but output remains limited, keeping prices steady between $800/MT and $820/MT EXW. This competitive pricing has allowed U.S. lactose to maintain its strong position in Southeast Asia. Meanwhile, EU-sourced lactose has lost some competitiveness in export markets due to higher pricing. European prices remain elevated but have softened slightly, ranging from €750/MT to €850/MT EXW, depending on the brand.

Reduced demand from feed manufacturers, following feedstock replenishment, has led to a decrease in buying activity in this sector. Additionally, lower demand in the whey protein concentrate (WPC) and whey protein isolate (WPI) markets, which consume much of the available whey, suggests that future lactose production may be further constrained.

Overall, the market is a step further compared to last month in the transitional phase as regional demand shifts and production dynamics change. Demand can be found for certain brands and origins, still keeping the market active but with less volume.

Bdairy Market Outlook: Neutral