EU short-term outlook: Growth in cheese and whey to continue

Average raw milk prices in May 2025 remained 28% above the 5-year average. In most countries in EU, weather remains favourable for grassland conditions. This, coupled with overall stability in input costs is likely to support margins for farmers through 2025. Fertilizers prices are stable, however energy prices are more volatile following tension in the Middle East. Demand is more questionable as consumers are spending more cautiously following increasing food inflation from Jan-Apr 2025. Following a significant decline of 3.5% in 2024, the size of the dairy herd is likely to continue the trend. However, the rate of decline is expected to slow down to another 1% in 2025. The trend of declining cow herds has been offset by higher yields (+1.2%). Milk solids have continued to increase for another consecutive year, up by 0.2% for fats and 0.1% for proteins. Increase in milk fat content is relatively more following strong domestic demand and good availability and quality of forage. ...