1. Weekly Price Overview

Mixed Trends in Cheddar Cheese Markets as EU and US Face Price Pressure While Oceania Firms

In W49, European Union (EU) cheddar cheese prices averaged USD 4.84 per kilogram (kg), marking a 1.12% week-on-week (WoW) drop and a 4.60% month-on-month (MoM) decrease, but remaining 7.00% higher year-on-year (YoY). The downward pressure reflects ample milk availability, supported by strong YoY milk production growth in major producing countries such as Germany and France.

A similar bearish trend was observed in the United States (US), where cheddar cheese prices fell to USD 3.11/kg, down 5.40% WoW, 14.89% MoM, and 17.09% YoY. US cheddar futures also weakened, averaging USD 3.38/kg, marking a 12.08% WoW fall, a 12.24% MoM decline, and a 13.28% YoY drop. The price softness is largely driven by increased cheese production as year-end output ramps up and more milk is diverted into cheese vats. Nonetheless, seasonal retail demand remains supportive as grocers build inventories, while bulk demand ranges from steady to slightly lighter. Export interest continues to provide some support, with sufficient spot cheese loads available to meet current demand.

In contrast, Oceania recorded a modest price recovery, with cheddar cheese averaging USD 4.64/kg, up 3.92% WoW and 1.09% MoM, although still 2.11% lower YoY. This upward movement is primarily attributed to strengthening export demand for Oceania cheddar, which has helped offset the generally weak global dairy demand environment.

2. Price Analysis

Ample Cheese Supply Weighs on Prices Despite Pockets of Demand Strength

According to the Food and Agriculture Organization (FAO), the global dairy price index averaged 137.47 points in Nov-25, reflecting a 3.12% MoM decline. This drop was largely driven by broad-based price weakness across major dairy commodities, underpinned by rising milk production and ample export supplies in key producing regions. Specifically, the cheddar cheese price index fell by 1.80% MoM to 144.32 points due to sufficient supplies in the EU and Oceania. However, firm demand from Asian and Near Eastern markets helped limit the downward trend.

Contrasting signals were observed in the most recent Global Dairy Trade (GDT) auction held on December 2. While the overall GDT price index declined by 4.3% from the previous event to USD 3,507 per metric tons (mt), cheddar prices strengthened, rising 7.2% to USD 4,639/mt. This increase was supported by robust buying interest from North Asia, the Middle East, and South Asia/Oceania. In contrast, mozzarella prices softened, declining by 1% from the previous auction to USD 3,182/mt, highlighting divergent demand dynamics within the cheese category.

From a supply perspective, the United States Department of Agriculture (USDA) estimates EU cheese production at 10.79 million metric tons (mmt), representing a 0.06% YoY increase. Production is projected to edge higher in 2026 to 10.81 mmt, up 0.2% YoY. It is also worth noting that cheese remains the core focus of the European dairy processing sector, supported by strong domestic consumption and solid, though slightly easing, export demand. This sustained production growth suggests continued downside pressure on cheese prices, pointing to a bearish outlook into 2026.

In the US, cheese demand conditions offer some near-term support. Retail demand for foreign-type cheeses is reported to be strong, with retailers placing larger orders to mitigate potential delivery disruptions during the final weeks of Dec-25. Foodservice demand remains steady, while export demand ranges from steady to strong, providing additional support to the market despite broader global price softness.

3. Strategic Recommendations

Strategies for Stabilizing Cheese Prices and Capturing Growth in Key Markets

With abundant milk supplies and rising cheese production putting downward pressure on prices, EU producers should consider optimizing inventory and production cycles to avoid oversupply. Targeted exports to high-demand regions, particularly in Asia and the Near East, can help stabilize prices. Diversifying product offerings, such as value-added or specialty cheeses, could also capture higher margins amid a generally bearish market.

In the US, producers and distributors should focus on aligning production with demand peaks, especially during year-end seasonal surges. Leveraging export opportunities in regions with growing cheese demand can help balance domestic oversupply. Additionally, promoting foreign-type cheeses and emphasizing product differentiation through branding or packaging innovations could enhance retail traction and maintain steady sales volumes.

Oceania stakeholders should continue to prioritize export markets, particularly in North Asia, the Middle East, and South Asia, where demand is robust. Strategic engagement with international buyers through long-term contracts can secure price stability. Investments in efficient logistics and supply chain management will also ensure that Oceania cheeses reach high-demand markets competitively, maintaining the region’s export-driven growth.