Dairy commodity prices remain firm across Europe on the back of very strong demand. The 2018 World Cup kicks off in Russia this week, which is very supportive of dairy product prices. Cheese demand in particular has been very strong over the last month, as pizza consumption spikes during a World Cup year.

This is clearly evident in European spot markets for cheese, with mozzarella trading as high as €3,450/t this week. This is more than 40% higher than where mozzarella prices started 2018. On the back of strong buyer demand for mozzarella, cheddar prices are also firm around the €3,250/t mark.

Away from the World Cup, markets are also concerned about milk supplies in Europe, which is helping to support the price outlook for the coming months.

The last month has brought excellent weather to much of Europe, but the situation is now becoming very dry in many parts. Milk constituents will drop if temperatures remain too high in some countries and many dairy buyers are becoming increasingly worried that milk supplies on the continent will be lower than first estimated.

On butter markets, spot prices are holding firm above €6,000/t, particularly for fresh product.

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