Milk Market: Swiss Cooperative destroys value creation Market Analysis from 20 December 2024

Protein concentrates (casein) stable, skimmed milk powder slightly declining, cheese declining, spot milk price and milk fat sharply declining.

Review and Current Situation

As is often the case before Christmas, we are witnessing a market crash. The trajectory for 2025 will only become clear by the end of January. The current spot milk price stands at €0.44, and the products produced from it will weigh on the market until the end of January – in some cases even until mid-February. If prices do not begin to rise slowly by the end of January, a further decline can be expected until June/July. However, a positive note is the goal to stabilise the milk price in Europe at around €0.50.

Situation in Switzerland?

In Switzerland, a cooperative has caused significant unrest and declining prices.

After the Swiss Central Bank cut interest rates by 0.5% to now 0.5%, the exchange rate improved temporarily. However, we still expect about a 5% stronger Swiss Franc in 2025.

Raw milk cheese stocks remain tight, and any relaxation of the situation is not expected until at least autumn 2025.

Milk Market: Swiss Cooperative destroys value creation

The influence of cooperatives on value creation in the Swiss dairy industry is currently evident. This year saw an oversupply of milk, and two major dairies are facing financial difficulties. A significant cooperative in milk trading attempted to alleviate the situation by outsourcing cheese production to third parties.

Despite a long-standing distributor, this cooperative chose to bypass them and offer cheese directly, collaborating with a questionable distributor who competes with an established provider. This decision led to sales issues for the traditional supplier.

The disappointed distributor saw this as a chance for revenge. Through his partner, he contacted a large competitor in Switzerland and purchased cheese at a low price to offer it to the cooperative's customers at a reduced rate. This has led to a dangerous downward spiral.

This situation highlights how strategic missteps, and thoughtless partnerships can sustainably harm value creation. Unfortunately, the cooperative shows no insight; on the contrary, it describes the action as successful and intends to intensify it in the spring.

Outlook for Q4 2024 and Q1 2025

- Q4 2024: Christmas

- Q1 2025: We will know more by the end of January.

The announced trade policy of the USA and potential tariffs could further destabilise the market and cause sudden price fluctuations.

We will be present at the following trade fairs:

?-??????? Marca, Bologna, 15–16 January 2025

-??????? Winter Fancy Food, Las Vegas, 19–21 January 2025, with our partner World's Best Cheese

-??????? Sirha, Lyon, 23–27 January 2025

-??????? Tutto Food, Milan, 5–8 May 2025

-??????? PLMA, Amsterdam, 20 & 21 May 2025

-??????? International Cheese Awards 2025

-??????? Summer Fancy Food, New York, 29 June – 1 July 2024, with our partner World's Best Cheese

-??????? Le Mondial du Fromage et Produits Laitiers, Tours (France), 14–16 septembre 2025

-??????? Anuga, K?ln 4.10 – 8.10.2025

We would like to thank all our readers, employees, suppliers and customers for their patience and valuable cooperation, and wish them a Merry Christmas and a Happy New Year. We will continue to support you next year.

Stay informed and enjoy the exquisite Swiss flower meadow cheese with raw milk! Tastes good, is healthy and calming.

Best wishes, Affineur Walo

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