European Whole Milk Powder pricing is driven by the combined dynamics of butter and skim milk powder, alongside overall milk availability. With butter rangebound and SMP having turned meaningfully firm, the WMP outlook has shifted modestly upward compared to expectations at the start of the year.
Strong milk production throughout 2025, particularly in the second half, enabled increased WMP manufacturing. Producers have been building stocks during this period of abundant supply, resulting in higher inventory levels heading into 2026. European spot availability remains relatively high, keeping EU prices slightly below the theoretical fat and protein fair value, meaning sellers are still competing for buyers rather than the reverse.
One notable development is the significant convergence between EU and New Zealand WMP prices, which are now trading within a $100/mt bandwidth for the first time since late 2021. This narrows the discount European producers have traditionally offered and has implications for export competitiveness going forward.
The outlook shifts in H2 2026. European milk production is forecast to decline through Q3 and Q4, falling below 2025 levels. As milk availability tightens, production of butter and SMP will follow, pulling WMP prices higher. Recovery is expected to begin gradually in Q3 and build momentum into Q4. If the SMP bull run extends or butter stabilises at higher levels, WMP valuations could be pulled higher sooner than seasonal supply tightening alone would imply.
Read the full WMP market analysis in Vesper’s Free Dairy H1 2026 Market Outlook: https://vespertool.com/downloads/butt
