As we step into 2025, the European cheese market is alive with both challenges and opportunities. With a focus on popular varieties such as mozzarella, cheddar, and Emmental, we explore how evolving trends, supply dynamics, and consumer behaviour are shaping the landscape. From rising prices to innovative sales strategies, here’s what’s driving the market forward.

Cheese prices in Q1 suggests a complex market dynamic. Official market rates appear to be under the price of what is being offered by the Dairies, but there are notable factors at play that could influence the overall pricing environment. Q1 end users seem to be “Christmas Shopping” and are gone until the start of next year.

This pre end of year strategy has led to reports of spot offers being made below the prevailing market prices. These spot deals, while potentially offering value for opportunistic buyers, may not fully reflect broader market trends heading into Q1. It’s essential to consider that such offers might signal temporary market adjustments rather than sustained pricing pressure. Buyers and stakeholders should remain vigilant, monitoring whether these practices impact Q1 pricing stability or merely create short-term variability.

Price Surge Across the Board

Cheese prices are climbing, and it’s no surprise given the complex interplay of supply and demand:

• Mozzarella is now priced at €4,100/mt across Europe. A potent mix of robust demand and limited production keeps the market tight.
• Cheddar commands €4,850/mt, driven by shrinking stock levels and elevated milk prices.
• Emmental isn’t far behind at €4,750/mt, with both consumers and the food service industry competing for supply.

Overall, cheese prices have jumped by 10-12% year-on-year, fuelled by rising input costs and unwavering consumer interest in retail and food service sectors. This upward trajectory is expected to persist through the first quarter of the year.

Supply Chain: Strains and Constraints

The backbone of the cheese industry — its supply chain — is feeling the strain:

• Milk Production Woes: Reduced profitability and disease outbreaks, such as bluetongue, have curtailed milk output across the EU. This limitation could extend well into early 2025.
• Export Challenges: European cheese remains a global favourite, but Brexit complexities and competition from other regions are putting supply chain efficiency to the test.

Consumer Trends: The Ever-Growing Appetite

Demand for cheese continues to soar, and the factors behind this trend are fascinating:

• Global Influence: Western-style diets are gaining popularity in Asia, where pizza and fast-food culture drive cheese consumption, indirectly impacting European pricing.
• Convenience Rules: Closer to home, consumer preferences are shifting toward easy-to-use options, such as pre-sliced and grated cheese, opening new avenues for targeted sales.

Reflections on 2024: Lessons for the Future

The past year was a rollercoaster for the dairy industry. Rising costs, labor shortages, and fluctuating demand tested producers, but resilience shone through. Innovations, such as cream-based products tailored for international markets, highlighted the sector’s ability to adapt. New Zealand’s success in China offers a roadmap for Irish and European producers looking to strengthen their global footprint.

Our heartfelt thanks go out to all our customers for their unwavering support in 2024. Your trust and partnership remain the cornerstone of our success.

Looking Ahead: Cheers to 2025

As the cheese industry braces for another dynamic year, opportunities beckon for those ready to adapt. By focusing on high-quality products, innovative sales strategies, and emerging market demands, producers can turn challenges into triumphs.

To our partners, customers, and colleagues, we wish you a Merry Christmas and a prosperous New Year. Here’s to a successful 2025 filled with growth, innovation, and plenty of delicious cheese!