European and North American cheese markets are broadly stable this week, but the underlying tone is slightly bearish. Milk production in both regions is close to its seasonal peak, and the resulting surplus is leaving cooperatives with limited options. Manufacturing lines are running at capacity, with remaining volumes sold on spot markets to the highest bidders. While cheese is not particularly profitable at current farmgate milk prices, it valorises better than spot milk, keeping production high.
The pressure is showing up across categories. European cheddar prices have continued falling on slow demand and strong flush supply from West-EU and Ireland, while US cheddar is trading at roughly a $400/mt discount and competing for the same export markets. Gouda is drifting lower in quiet trade, with Western European milk output running more than 5% above last year and most buyers having already concluded their Q2 volumes. Emmental is splitting in two directions, with euroblocks trading up to EUR 500/mt above grating quality after producers shifted heavily into grating during Q1. Mozzarella prices remain under downward pressure on both sides of the Atlantic, with the US discount limiting European export opportunities into markets such as South Korea and Japan. Consumption is holding steady across retail and foodservice channels.
Outlook
European cheddar and gouda are likely to keep drifting lower through the milk flush before buyers step in for Q3 coverage. US cheddar should hold around current levels if exports remain strong. Emmental euroblocks look stable, with grating quality potentially weakening further on stock pressure. Mozzarella may find some support from export flows now that European and US prices have converged.
