European cheese markets are experiencing a strategic standoff, with producers proactively selling Q1 and Q2 volumes at lower prices to avoid seasonal weakness while buyers remain cautious, anticipating further declines.

Vesper’s Price Index for Gouda decreased to EUR 2,980/mt (€2.98/kg), down from the previous period, as Q1 and Q2 forward prices decline with producers working to secure sales ahead of anticipated seasonal weakness.

Producers are trying to get ahead of the traditionally weak Q1 spot market by securing sales now rather than risking unfavorable conditions later. They’re also taking into account slower December/January demand. However, buyers are being considerably more cautious, with most having the luxury of waiting until January to cover their volumes.

For Cheddar, Vesper’s Price Index remained at EUR 3,250/mt (€3.25/kg). Q4 prices remain relatively firm and stable, but Q1 and Q2 forward prices are edging lower as producers proactively sell volumes at slightly lower prices.

UK and Irish cheddar is notably cheap at the moment, adding competitive pressure to continental European markets, even though producers are at the end of the Irish milk season. US cheese markets are getting a brief lift from holiday demand but are still seeing supplies mount as milk and cheese production in the US remains very heavy.

For Emmental, Vesper’s Price Index remained at EUR 3,800/mt (€3.80/kg). Many producers have already sold substantial volumes for Q1 and Q2, locking in coverage well ahead of production at slightly lower prices. Emmental remains overpriced compared to other cheeses, which creates the feeling that prices will continue to correct.

Even though the payout price has lowered to EUR 0.435/kg in the Netherlands, market participants still anticipate a lot of milk being produced in Q1 and Q2 next year. Butter prices have also fallen further for Q1, adding additional pressure to cheese markets throughout Europe.

This cheese news is part of a more comprehensive cheese market analysis, for the full analysis, visit: https://app.vespertool.com/market-analysis/2481