Dairy Industry Braces for Storm as Milk Prices Set to Fall

The dairy industry is facing a potential storm as the BDM chairman, Karsten Hansen, warns of impending milk price cuts of up to 15 cents per kg. This follows a trend of dairy farms closing due to price pressure, with around 10 percent shutting down between 2020 and 2024. Meanwhile, Aldi is set to reduce cheese prices by up to 16 percent, which could save consumers up to 50 cents per product.

Milk prices in Germany, which have been rising since February 2025, are now showing signs of a decline starting in October. This follows a period of stability in the net price for Emmentaler and Viereckhartkaese cheese, despite increased demand. However, the price for block Gouda has decreased. Aldi's price reduction, effective from October 9, includes various types and forms of Gouda, Cheddar, and Emmentaler cheese.

Dairy farmers are feeling the pinch, with announced reductions in milk money of up to 2.75 cents per kg for September or October. DMK and Friesland-Campina have also implemented or announced price cuts, with FrieslandCampina reducing its payment to 53 cents per kg in October. The average payment price for conventional cow's milk was around 53.50 EUR per 100 kg in August, with a similar level expected for October. The industry is bracing for further price pressure, as Aldi's price reduction is likely to influence the entire market.

The dairy industry is grappling with a potential perfect storm, as milk prices show signs of decline and major retailers like Aldi reduce cheese prices. Dairy farmers are facing reduced milk money, with the average price expected to remain around 53.50 EUR per 100 kg in October. The industry awaits the outcome of ongoing negotiations between milk producer associations and milk processing companies, as the entire market braces for further price adjustments.