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May brought a calmer tone with low volatility entering June across the global dairy market. Trade tensions have subsided for now, with Trumps tariff war on hold it seems pending further discussions. Weather conditions across Europe were favorable, supporting solid milk yields, while no major disease outbreaks or trade disruptions occurred. Buyers continue to seek market discounts, hoping for positive milk yields globally to put pressure on the market, however, the market seems to handle such pressure quite well.

Milk Collection EU:

EU + UK
Headline milk production in March is -0.2% vs last year, stronger than the 0.4% forecast, Fat and Protein content is however up, meaning component adjusted production is up 0.6% YoY.
DE/FR/NL/UK showed good growth vs February, and April/May are following suit, without official data to back this up. Farm Gate prices are strong, leading to strong forecasts, as margins should drive production growth. Poland, Ireland and the UK continue to show impressive growth, whilst France, Germany, and the Netherlands play catch up after a slow start to the year.

US
US milk production was up 1.5% from last year, posting strong gains, despite reducing farmer margins. The increase in collections was helped by an addition of 1.1% of dairy cows YoY. Component adjusted production is up 3%.

NZ
Production in NZ continues to wind down, and we experienced a drier Feb/March period, reducing pasture growth. May/June things are improving, and the forecast looks positive.
Farmer margins are also profitable, so the 25/26 season should prove promising. Australia production is up, but basis solid components, production is down -0.4%.

GDT:
Production in NZ continues to wind down, and we experienced a drier Feb/March period, reducing pasture growth. May/June things are improving, and the forecast looks positive.
Farmer margins are also profitable, so the 25/26 season should prove promising. Australia production is up, but basis solid components, production is down -0.4%.

SMP prices held steady through the month at 2,350–2,400 EUR/MT FCA EU, depending on brand and origin. Futures have ticked back up above 2,400 EUR/MT.

EU March production was up 2.27% year-on-year (+3KMT), with exports slightly down (-0.4%) but domestic demand firming (+2.8%). Stocks are up compared to last year, though still coming from a low base.

Raw material prices are trending higher again — SMC now back above 2,000 EUR/MT FCA DE/NL — which is helping to keep a floor under SMP pricing.

In the US, SMP/NFDM output is down 9.5% vs last year, with limited production forecasted ahead. Europe remains the most competitively priced origin globally, with little pressure to ease further. That said, most buyers are covered until July/Aug, which is keeping spot activity quieter.

The US is pricing too high to compete (2,750–2,800 USD/MT FCA = ~2,415–2,470 EUR/MT), and Oceania is well sold for the current season with no real need to move volume until new season milk arrives.

Milk peak in Europe appears to have passed, so the wave of raw material coming into the market should now ease — reducing pressure on manufacturers to drop prices.
Market Outlook: Slightly Bullish

EU butter production was up slightly in March (+0.6% YoY), but from a low base. The bigger story is on stocks — still historically tight, sitting 13% below last year and well under both 3- and 5-year averages. Warehouse partners are openly reporting empty inventories and are
actively seeking storage business, a clear sign of the market’s current tightness.

Butter prices ranged between 7,250–7,450 EUR/MT FCA EU/IRL, with occasional dips to 6,900-7,000 EUR/MT in May, but any move below that floor was quickly met with buying interest, showing strong support.

Production is gradually picking up at these levels, and forecasts suggest higher output vs 2024 across the season. Poland remains the most competitive origin thanks to high milk intake and robust butter output.

Cream prices have climbed sharply to 8,800-8825 EUR/MT FCA EU (vs 8,000 EUR/MT last month), which is pushing butter values higher as processors chase margin.

AMF is following the same trend, tight prompt availability has pushed offers to above 9,000
EUR/MT FCA EU, up from 8,500 EUR/MT just a month ago.

Overall, the fat complex still feels tight on supply, while demand remains firm despite
elevated prices. Until stocks build meaningfully, the market remains well supported.
Market Outlook: Slightly Bullish

BMP prices have finally stabilized after months of decline, holding at around 2,350–2,450 EUR/MT FCA EU. At these levels, demand has been strong enough to halt the drop, helped by low stocks and still-limited production, as butter output remains below previous years.

Pricing now sits largely in line with SMP, which could lead to further demand destruction on the export side, particularly from condensed milk producers looking for more cost-effective alternatives.

Looking ahead, the supply picture doesn’t improve much, with butter production not ramping up, BMP output is expected to remain tight. The US is also producing less fat as milk gets diverted toward cheese, keeping their BMP availability limited.

This again makes Europe the most competitive origin for exports, even if volumes remain capped.

The near-term outlook feels steady, supply and demand look balanced for now, with little reason for a major move either way.
Market Outlook: Neutral

FCMP production is up 7% YoY, but that headline figure is skewed, most of the growth is coming out of Denmark, where production has surged +163%. Meanwhile, key producers like Ireland, France, Germany, and Poland remain behind last year.

Despite high prices (4,200–4,400 EUR/MT FCA), demand has held up well. Many smaller buyers are still uncovered, and large chocolate producers continue to buy hand-to-mouth.

That said, some substitution is happening, particularly with SMP+AMF, as the price spread
tightens.

In Europe, demand looks stable at current levels, with any dip below 4,200 EUR/MT quickly
attracting interest.

Overall, the market feels slightly bullish, supply growth is concentrated in one origin, demand is holding, and buyers are stepping in whenever prices ease.
Market Outlook: Slightly Bullish

EU Whey prices started softening in May, driven by rising cheese production and several factories maxing out WPC80 capacity. As a result, more liquid whey is now being diverted back into SWP streams.

Cheese output is up 1.5% YoY and tracking well above both 3- and 5-year averages, which means more whey concentrate is entering the market. Prices for whey concentrate are now around 250–300 EUR/MT FCA EU.

SWP prices are adjusting accordingly, Grade C is at 920–980 EUR/MT, Grade B is at 1,000–1,100 EUR/MT, while Grade A is still holding up at 1,200 EUR/MT FCA.

Despite the price pressure, market stocks of SWP remain tight, and EU product is still the most competitively priced globally for food-grade specs. Exports are up 17% YoY from the EU, and even the US is showing a 9% increase in exports, confirming robust global demand.

That said, feed-grade whey is under pressure, the US flooded export markets with cheap material following the China tariff issues, leaving buyers well stocked and in no rush.

Overall, production is set to increase further, but with demand still strong at current levels. This points to a slightly bearish outlook, but not a crash, just some correction as volumes rise.
Market Outlook: Slightly Bearish