European Cheddar production maintained strong momentum throughout 2025, supported by abundant milk availability. However, the supply-heavy H1 picture originally anticipated has not fully materialised. Stocks across Europe remain relatively low despite solid production, as export demand and firm domestic consumption have kept the market from building meaningful inventory.
Buyers who held back expecting cheaper spot opportunities in Q1 have largely been disappointed, and buying behaviour has shifted as a result. Q2 coverage is increasingly being locked in, with some participants already looking at Q3. Current prices are firm, trading between €3,300 and €3,750/mt. The premium that Cheddar used to command over Gouda and Mozzarella has nearly vanished as those varieties have also become less available.
Competition between European and US Cheddar producers adds complexity to the outlook. With both regions producing good volumes, export markets are contested. The current exchange rate is lending support to US export competitiveness, which limits how far European prices can push on the export side.
The market dynamics are expected to shift in H2 2026 as European milk production is forecast to decline through Q3 and Q4, falling below 2025 levels. This supply tightening should support a gradual price recovery starting in Q3 and building into Q4. Given that stocks are already low heading into the flush, the H2 tightening may prove more supportive than originally anticipated.
Read the full Cheddar market analysis in Vesper’s Free Dairy H1 2026 Market Outlook: https://vespertool.com/downloads/butt
