European cream prices have surged above $10,600 per ton as holiday demand combines with a limited milk supply across the EU. DCA Market Intelligence reports this milestone, driven by ongoing supply chain constraints and dairy shortages impacting products like butter, cheese, and milk powder. The Netherlands has seen a 2% drop in milk production, allowing Poland to overtake it as Europe’s third-largest dairy producer. Some analysts predict a price decrease post-holidays, but ongoing market volatility makes future projections uncertain.
European dairy markets are experiencing unprecedented price hikes as the holiday season nears, with the cream price index for Northwest Europe exceeding $10,600 per ton. On November 9, DCA Market Intelligence, a price reporting agency (PRA) providing independent insights to the agri-food industry, reported a benchmark price of $10,754 per ton for cream, marking a historic milestone driven by a constrained milk supply across the EU.
According to Eric de Lijster, Manager of PRA at DCA Market Intelligence, reaching this price point was once unthinkable. “But since early 2022, factors like the Ukraine conflict have reshaped markets, sustaining higher dairy prices,” he stated. Cream, a staple in numerous products from ice cream to coffee creamers and pastries, is in high demand, yet milk supplies remain tight. This shortage forces dairy producers to make strategic choices on milk allocation for various products, contributing to rising prices across milk powders, butter, cheese, and other dairy goods.
The Netherlands, historically one of Europe’s top dairy producers, has seen a year-over-year decline in milk output by 2%, a drop that enabled Poland to surpass the Netherlands as the EU’s third-largest dairy producer, following Germany and France. Labor shortages and tightening agricultural regulations are putting further pressure on Dutch dairy farms, adding to the broader supply challenges across the EU.
Despite high demand, analysts suggest cream prices may decline after November as holiday purchases peak and trade slows down. However, with current market dynamics remaining volatile, projections for long-term price relief are cautious at best.