The global dairy industry faces unprecedented volatility as new US import tariffs trigger market-wide disruption. With retaliatory measures, stock market fluctuations, and strengthening dollar values, dairy commodity traders and producers are navigating increasingly complex market conditions.

Market snapshot: Critical shifts in dairy commodities

Butter markets under pressure

European butter currently sits at €7,200/mt while US butter trades at a significant discount (€4,623/mt), creating global arbitrage opportunities despite new trade barriers. The backwardation in futures contracts is preventing strategic storage solutions, forcing more cream onto spot markets at €8,200-8,500/mt across Europe.

SMP weakening during peak production

With Spring milk production peaking in the Northern Hemisphere, SMP prices have decreased to €2,370/mt in Europe. Global demand remains sluggish while production costs hover around €2,200/mt. Meanwhile, Oceanian SMP maintains its premium position at €2,569/mt as the Southern Hemisphere season winds down.

WMP follows downward trajectory

European WMP prices have decreased to €4,300/mt, reflecting the general market weakness. Spot milk availability is increasing as processing facilities reach maximum capacity during the seasonal peak. The ongoing FMD situation in Eastern Europe (now with 10 confirmed cases) adds another layer of uncertainty to near-term supply projections.

What’s driving current market conditions?

Multiple factors are converging to create today’s uncertain market environment:

  • Trade Tensions: Implementation of US import tariffs and potential retaliatory measures
  • Currency Fluctuations: Strengthening US dollar impacting global competitiveness
  • Seasonal Production Cycles: Northern Hemisphere approaching peak while Oceania concludes its season
  • Animal Health Concerns: FMD outbreaks in Eastern Europe threatening supply chains
  • Macroeconomic Uncertainty: Growing recession concerns affecting broader market confidence

Access our complete market analysis

For our comprehensive breakdown of global dairy markets, including detailed price analysis, regional variations, and forward-looking projections for butter, SMP, and WMP markets, read our full market intelligence report here: https://app.vespertool.com/market-analysis/1849

Vesper provides market intelligence and advisory services to dairy industry stakeholders worldwide. Our analysis combines data-driven insights with on-the-ground market expertise to help clients navigate volatile market conditions.