The European dairy market in 2026 is not one market, it’s a collection of very different stories depending on which product you’re buying. Some categories are well-supplied and stable. Others have tightened well beyond what was expected at the start of the year. Knowing the difference is critical for procurement planning.
Here’s the overview for H2 2026.
Raw milk production delivered strong volumes throughout 2025, with momentum carrying into 2026. The seasonal flush is expected to deliver significant supply through Q1 and Q2. Importantly, milk quality in key countries including the Netherlands and Ireland is running significantly higher year-on-year in fat and protein content, amplifying the effective supply of butter, cheese, and powder products.
Butter is rangebound in Europe at around €4,500/mt, working through elevated stocks in a market where demand has not accelerated. The picture in the US and Oceania is notably firmer, with US stocks at a five-year low. The European story shifts in H2, with milk production expected to decline through Q3 and Q4, supporting a gradual price recovery.
SMP has turned firmly bullish. US NFDM production at multi-year lows has effectively redirected international buyers toward European origins, running EU drying capacity at full utilisation. The latest GDT Pulse auction showed NZ SMP at nearly $300/mt above European origins.
WMP has shifted modestly higher, with EU and New Zealand prices converging within $100/mt for the first time since late 2021. The H2 milk decline is expected to pull WMP prices higher as butter and SMP production tightens.
SWP has seen European prices move above US levels, a reversal driven by higher energy costs and accelerated Middle Eastern buying. Whey permeate and lactose remain stable and well-supplied. WPC80 and WPI are the tightest products in the complex, with Q2 WPC80 volumes close to sold out globally and EU WPI prices approaching €25,000/mt.
Cheddar, Gouda, and Mozzarella have all seen prices move higher since early February as lean stocks and firm demand have absorbed production faster than expected. Buyers who held back expecting Q1 discounts have largely been disappointed. H2 supply tightening as milk declines could support further price recovery.
The full Vesper Dairy H2 2026 Market Outlook covers all categories in detail, with price forecasts and procurement analysis. Free download: https://vespertool.com/download/dairy-h2-2026-market-outlook/
