May 28, 2025 – Weekly Market Update

European cheese markets are experiencing a notable shift as buyers return with increased urgency for Q3 purchasing, while production constraints loom on the horizon. After weeks of price volatility across major cheese categories, market fundamentals are pointing toward potential supply tightening in the coming months.

Key market developments this week

Demand Surge Drives Price Stability: Buyers who had been holding off on forward contracts are now actively entering the market for June and Q3 volumes, creating upward pressure on prices across multiple cheese varieties. This shift in buyer behavior is particularly evident in mozzarella and gouda markets, where Q3 contracts are trading at €50-100/mt premiums above current spot prices.

Production Seasonality Concerns: While European cheese production remains at full capacity during the current milk flush period, historical patterns suggest a 1-2% decline in production typically occurs after Q2. This seasonal adjustment, combined with strengthening demand, could create tighter market conditions in Q3.

Regional Price Dynamics: The price gap between European and U.S. cheese continues to influence global trade flows, with American producers offering significant discounts that are redirecting Asian demand away from European suppliers.

Category highlights

  • Cheddar: Vesper Price Index stabilized at €4,650/mt after recent declines
  • Mozzarella: Sharp weekly increase to €4,130/mt in Europe as buyers rush to secure Q3 supplies
  • Gouda: Steady at €4,350/mt with full production capacity maintaining stability
  • Emmental: Premium positioning continues at €5,100/mt driven by strong retail consumption

Market outlook

The convergence of seasonal production patterns, accelerating Q3 demand, and depleting spot market availability suggests European cheese markets may be approaching an inflection point. While current production levels remain robust, the traditional post-Q2 production decline could coincide with sustained strong consumption to create a more balanced, or potentially tight, supply-demand dynamic.

For comprehensive analysis including detailed price movements, regional comparisons, and forward market insights across all major cheese categories, access the full Vesper Weekly Market Report here: https://app.vespertool.com/market-analysis/1970