As we move into the third quarter of 2025, the Irish and European cheese markets are navigating a complex landscape shaped by fluctuating milk production, evolving consumer preferences, and broader economic factors. Last year’s challenging weather continues to have residual effects, but with the arrival of summer, expectations are shifting. This report provides an overview of the current state of the cheese industry—focusing on mozzarella, mild cheddar, and mature cheddars—and offers insights into Q3 developments and a forward look into Q4.

Mozzarella has experienced a significant increase in demand over the past few weeks. Many dairies are under pressure to secure enough milk for production to keep up with this surge. All other cheeses have been stable with mild cheddars slightly back.

Market Overview:

• Mozzarella: Mozzarella demand has remained consistently strong through Q3. Current pricing has edged up further, with average rates around €4,470 per metric ton. This reflects the increased seasonal demand, particularly from foodservice sectors gearing up for holiday tourism and outdoor dining spikes across Southern Europe.
• Cheddar (Mild and Mature): Cheddar pricing has held steady but on the higher side, with mild cheddar currently trading around €4,850 per metric ton and mature cheddar above €5,250. Buyers are securing long-term contracts for Q4 to hedge against further hikes, with no slowdown in demand or pricing momentum evident at this stage.

On the supply side, milk production saw only modest improvements, keeping input costs high. Ongoing challenges, such as feed costs, environmental compliance, and lingering impacts from the foot-and-mouth disease outbreak in Germany, have added pressure to the supply chain.

Buyers have responded by locking in longer-term contracts for Q4, anticipating further price increases. Producers, meanwhile, continue to focus on efficiency and premium product lines to maximize margins in a tight and competitive market.

In essence, Q3 has reinforced the strength of cheese pricing, with little indication of relief heading into the final quarter of the year.

Sales Perspective:

• Demand Strength: Retail and export markets are showing healthy appetite for both mozzarella and cheddar. The summer surge in consumption has supported sustained volume sales, with mature cheddar gaining particular traction in Northern Europe.
• Product Trends: Diversification continues to drive product development. Flavored cheddars, extended-maturity options, and regional specialty mozzarella styles have performed well, catering to niche consumer groups and driving premiumisation.

Procurement Perspective:

• Milk Supply and Costs: Although milk volumes have improved slightly due to better grazing conditions in Ireland and parts of Western Europe, the pace of increase is slow. The cost of milk remains high—averaging 53.7 cents/kg in many EU countries—keeping upward pressure on cheese production costs.
• Butter and Ingredient Costs: Butter prices, which affect the allocation of milk fat, have also stayed elevated, hovering in the €7,300–€7,400/tonne range. This makes cheese an increasingly attractive output route for dairies, further tightening availability.

Impact of Foot-and-Mouth Disease (FMD):

The fallout from FMD cases in Germany continues to influence market sentiment:

• Export markets have placed scrutiny on sourcing origins, leading to logistical rerouting and added cost burdens.
• Buyers are avoiding supply risk by pre-booking cheese from non-affected regions, intensifying demand pressure in Ireland and Western Europe.

Conclusion and Outlook for Q4 2025:

Looking ahead to the final quarter of the year, it appears that cheese pricing is not only holding but trending upward across the board. This is being fuelled by a combination of:

• Seasonal production constraints as milk yields typically taper off toward winter.
• Strong forward bookings from food processors and retailers anticipating holiday spikes.
• Continued uncertainty in the global dairy landscape, with feed costs, disease outbreaks, and environmental restrictions all playing a role.

In practical terms, stakeholders should expect tight supply and further pricing pressure across mozzarella and cheddar categories in Q4. Securing volume and mitigating exposure through long-term supply arrangements will be critical. Producers able to scale efficiently while maintaining quality are in a strong position to capitalise.

In summary, Q3 has brought further growth and pricing resilience to the cheese sector, with no signs of slowing as we approach year-end. Strategic agility will remain essential for both buyers and sellers navigating this upward market trajectory.