CURRENCY SHIFTS AND MARKET DYNAMICS LED TO A TEMPORARY SURGE IN DUTCH BUTTER IMPORTS, BUT EUROPE’S RISING MILK OUTPUT IS NOW EASING THE OVERSUPPLY.


The impact of a strong Euro In addition to abundant milk, currency markets added further pressure. The euro–dollar exchange rate climbed above $1.17 over the summer, the highest level in three years. A 15% rise within a few months is unusually fast for major currency pairs. This unexpected development is unfavourable for European dairy exporters, given the production surplus that needs to find a home on the world market. With a weaker dollar, U.S. exporters suddenly had the competitive advantage and gained market share. European dairy companies complained loudly about the situation.


The strong euro created another problem. It pushed the price difference between U.S. and European butter to nearly $3,000 per metric ton, which is an unusually large gap. At that time, the European butter market still felt tight and well supported. This made it attractive for European dairy traders, many operating from the Netherlands, to import large volumes of U.S. butter, mainly for industrial bakery use rather than retail.


In July, the Netherlands imported 1,364 metric tons of U.S. butter, compared with only just 5 metric tons in the same month a year earlier, according to Harmonised System trade data. Monthly imports had not exceeded 100 metric tons in recent years. The July volume equalled nearly 15% of Dutch butter production for that month, which illustrates the scale.


Significant volumes were also imported from New Zealand. In May, the Netherlands imported more than 3,000 metric tons of butter and AMF from New Zealand. This was the highest monthly volume ever, equal to roughly 30% of national production. June and July were also elevated, at nearly 2,000 metric tons and over 1,500 metric tons, respectively. Other EU member states also increased imports, but the Netherlands dominated, accounting for more than 65% of total European imports.


These high import volumes proved temporary. As the market turned, Dutch imports from New Zealand dropped to 360 metric tons in August and 151 metric tons in September. Recent U.S. import data are delayed due to the recent shutdown, but imports likely fell as well. That is fortunate, because Europe’s own butter production has surged on the back of higher milk volumes, leaving the market oversupplied (Graph 2).


Milk Prices under big pressure Falling dairy commodity prices are dragging farm- gate milk prices down this autumn. Based on the raw- material value of milk, farmgate milk prices excluding sustainability premiums in Northwest Europe are falling toward €40 per 100 kilo, and potentially lower. That implies a price decline of roughly €15 per 100 kilo within just a few months. This means that farmgate prices are currently undergoing a very steep decline from a historical perspective. A recovery seems unlikely, as seasonal milk production in the northern hemisphere normally increases again in the run-up to the new peak in May.


In other words, there will be (far) too much milk in the coming months. An analyst summarized the situation aptly: “We need more beef and less milkfat.” In other words, sending more cows to slaughter would help relieve the milk market. This would also support the persistently tight beef market, which could readily absorb the additional supply (Graph 3).


Edwin Burgers E: edwin.burgers@admis.com T: +31(0) 320 788371


Graph 2: Cheese prices declined sharply Price in € per metric tons


500 1000 1500 2000 2500 3000 3500 4000 4500 5000


0


WE NEED MORE BEEF AND LESS MILKFAT - SENDING MORE COWS TO SLAUGHTER COULD HELP RELIEVE THE MILK MARKET AND SUPPORT THE TIGHT BEEF INDUSTRY.


Source: DCA Market Intelligence Graph 3: DCA Farm Gate Milk Index (in euro per 100 kilo)


10 20 30 40 50 60


0


Source: : DCA Farm Gate Milk Price Index below €45 in November (Source: DCA Market Intelligence) 13 | ADMISI - The Ghost In The Machine | Q4 Edition 2025


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32