As we edge into spring 2025, let’s hope the weather is a bit more cooperative than last year, which was a bit of a nightmare for the dairy sector. The poor weather in 2024 really threw a spanner in the works for milk production, causing a fair bit of fluctuation in cheese prices and making the market quite unpredictable. Now, with a change in the air, everyone’s keeping an eye on whether improved weather might help steady the supply and even out the prices for mozzarella, mild cheddar, and mature cheddars both here in Ireland and across European markets.

Market Overview

Mozzarella:

The Mozzarella market had been ticking along quietly until a couple of weeks ago when it suddenly spiked by €250 overnight. We’re now looking at prices around €4300 EXW, up from €4050 in Q1. Take a look at the graph below. This week’s Vesper Price Index (19/03/2025) rose to €4350 | $4759/mt ($2.16/lb) EXW in Europe, while in the US, it’s at €3667 | $4012/mt ($1.82/lb) EXW. At this week’s GDT event (18/03/2025), Mozzarella prices saw a rise of +5.1% on average, with favourable exchange rates also giving prices a nudge. The availability of mozzarella has tightened over the past two weeks as more April volumes were purchased throughout Europe. Given that mozzarella cheese consumption usually increases from this point onwards, we’re anticipating more demand in Q2 and Q3 compared to Q1. Despite an increase in milk production volumes, many buyers are still betting on the spot market to pick up mozzarella at prices lower than those currently offered for Q2.

Cheddar (Mild and Mature):

The European cheddar market has been on a solid upward trajectory over the past five years, with new product introductions growing by a healthy 13% annually. This growth is underpinned by a strong consumer preference for cheddar and increased demand from international markets. Despite the ups and downs in milk production costs, cheddar prices have managed to remain relatively stable. Particularly, mature cheddar has gained considerable popularity and is now in high demand.

Sales Perspective:

• Revenue Growth:  The Irish cheese market is projected to generate around US\€693.69 million in 2025, with an annual growth rate of 6.86% from 2025 to 2030. This growth is driven by steady domestic consumption and robust international demand, especially from the UK and EU markets.
• Product Innovation: Consumer tastes are evolving, with an increased interest in specialty and plant-based cheeses. In the plant-based segment, mozzarella continues to lead with 43.0% of consumer preference, slightly ahead of cheddar at 57.6%. Traditional cheese makers are also focusing on premium aging processes and innovative flavour profiles to stay competitive.

Procurement Perspective:

• Price Trends: As of early 2025, mozzarella is priced at approximately €4,050 per metric ton across Europe, while mild cheddar commands about €4,850 per metric ton, with mature cheddar fetching a bit more. Prices continue to reflect the fluctuations in milk supply and production costs.
• Supply Challenges: The European cheese market is currently experiencing some pressure due to tight supply conditions. Mozzarella prices are expected to remain high, with little easing expected until after Q4 2025, while cheddar prices have been more stable.

Impact of Foot-and-Mouth Disease on Milk Pricing:

Recent outbreaks of foot-and-mouth disease (FMD) in parts of Europe have disrupted dairy markets, adding an element of uncertainty to milk pricing:

• Export Restrictions: Countries including the UK, South Korea, and Mexico have imposed temporary bans on German dairy products following FMD outbreaks, reducing market access for affected producers.
• Market Uncertainty: Buyers are opting for dairy products from unaffected regions, shifting trade flows and creating pricing disparities.
• Milk Production Impact: Germany, the EU’s largest milk producer, has seen disruptions in milk supply, contributing to price fluctuations in the broader European market.

Conclusion and Outlook for Q3 2025

Looking ahead to Q3 2025, the cheese market is expected to maintain its growth trajectory. The global cheese market is set to expand at a CAGR of 8.1%, reaching an estimated €320.15 billion by the end of the year. In Ireland, cheese production is forecasted to increase by 0.6% to 10.8 million metric tons, supported by strong export demand.

Challenges persist, including ongoing supply chain pressures, environmental regulations, and potential volatility in milk pricing due to FMD outbreaks. Producers focusing on efficiency, innovation, and sustainability are well-placed to navigate these issues and seize market opportunities.

In summary, the Irish and European cheese markets for mozzarella, mild cheddar, and mature cheddars remain vibrant. Sales trends point to robust consumer demand, while procurement challenges continue to influence pricing and supply availability. With the dairy industry adapting to changing conditions, strategic planning and market responsiveness will be crucial for success in the upcoming months.

The outlook for mozzarella is somewhat similar to gouda: prices may fluctuate, but there’s a solid base to the price range. Ultimately, strong demand is expected to meet peak production, which should keep cheese prices within a predictable range.