Back to Business with GFD 2.0

Good morning to everyone who missed us over the summer break — and good morning to everyone who didn't notice we were gone. After six weeks of driving two kids from one overheated European destination to the next, dodging forest fires and outrunning droughts, we are back doing what we do best: bringing dairy commodity markets together, telling you what we think of those markets, and advising you on what you could do — and how we can help. Although we didn't spend six weeks doing nothing. Whenever the kids were entertained or asleep, we spent our time improving the website, adding a pile of new features and thinking about some new services we're rather excited about. We'll tell you about the first of those today, and more over the weeks to come. But first: what happened this summer, and where does the market stand?

In our last report we made a prediction about where we expected the market to be by the time we returned. Rereading that report now, it's clear we did not anticipate a summer this dry, this warm and this hot. Butter did not break as low as we expected, cheese trades roughly 20 cents above our forecast, and SMP jumped higher and more aggressively than we thought it would. The milk collection data shows the fingerprints of the hottest weeks very clearly. Over the past few days we have already touched base with our partners across Europe to get a feel for where we stand.

Butter: Slightly up, but still bearish

Butter first. High temperatures pulled buyers into the market and kept sellers away, pushing prices up through the first weeks of the summer. But buying interest never carried on, and milk deliveries recovered faster than expected — which sent butter sellers chasing the higher bids back down again. Where do we see the market today? Sellers are aiming above €4,000 on the back of expensive cream. Whether there are enough buyers willing to chase those offers once they are back from their break is another question. Our own calculations point to very limited buying needs for the remainder of this year. The curve shows Q4 and Q1 with only a very small carry. Unless Q1 buying interest picks up quickly, we expect butter to find buyers only once prices trade back below €4,000.

Over the coming weeks we don't think fresh supply is going to be the driver for butter prices — stocks are. And looking at the data, those continue to impress. Worldwide sentiment on butter remains weak too. The CME kept grinding lower, with prices below $2.00/lb (well below € 4000 for the entire 2027 curve) all the way out to December 2027. That is a cheap curve for the EU to compete with, and at the same time the gap with New Zealand has closed further. Butter demand needs to pick up and production needs to slow down fast. If it doesn't, our €3,000 butter prediction goes straight back onto the forecast sheet.

Powders: (un)Surprisingly Bullish

Then powders — mainly SMP. We have been bullish for a long time, even though the price action before the summer didn't look particularly bullish. But the underlying demand felt like it could break out, and the disbelief on the production side of the market that prices could rally only made us more convinced that they would. Add a bit of heat stress and less milk, and the market got the kicker it needed to jump.

Linda started brokering the SMP market again last week, with over 2,000 MT trading between our partners. Prices moved from €2,850 spot up to €3,150 for Codex Q4 over the course of the week. Our last reference price before the summer stood at €2,650. Is the rally over? Hard to say. We do think milk volumes can recover some of the hot weeks, but overall we are heading into a period of lower volumes. And where butter demand is largely covered and stocks are the highest we have ever seen, the opposite feels true on SMP. Plenty of buyers were happy to wait before the summer, and we expect a fair number of them to get a bit of a scare when they open their mailboxes — and to quietly hope their producer has mixed up the WMP price with the SMP one.

If another round of panic buying materialises, we can easily see a €150–€200 jump before things cool off again. But aiming much higher straight away? Sellers should keep in mind that the EUR/USD rate is not helping exports, and at these levels the EU becomes less competitive. That said, this rally felt surprisingly fundamental last week — so waiting for the hot air to escape looks like the wrong trade.

Cheese: Firm, but can it trade higher?

And then cheese. We called Gouda to top out at €3,100 and Mozzarella around €3,250 at best. Talking to our partners, spot Gouda sits in a range between €3,250 and €3,350 with most of it sold by the end of last week at €3,350, and Mozzarella is heading towards €3,700 for spot and Q4. The heatwaves alone cannot account for a rally like that, we have missed something in our analysis here.

The cheese market, to us, doesn't really make sense. From what we hear, a lot of the larger end users are struggling with their own sales. Production numbers look strong. And the traditional gaps between Cheddar, Gouda and Mozzarella have disappeared: the product that on paper is the cheapest to make is currently the most expensive one on offer for Q4. That feels unsustainable. Calling the cheese market overpriced is perhaps a step too far — but selling Mozzarella above what you can buy Cheddar and Gouda for in Q4 should be a profitable trade.

To get a better grip on this market, we decided to branch out. Rather than brokering cheese volumes on the side, we went looking for a dedicated cheese broker. Starting this week, Joey Sonnemans joins the Get Fair Dairy team, bringing together the partners we already service and adding plenty more to our network. We expect it to sharpen our cheese outlook considerably — and with it, our value to you. While Joey gets set up, drop him a line at joey@getfairdairy.nl if you'd like to connect.

Get Fair Dairy 2.0

And with Joey on the brokerage team, we have only touched the tip of what we have in store for you over the coming weeks. We spent a lot of time fine-tuning our website, and we hope it can earn a spot on the daily screen of every one of our customers. Over the next few weeks we will introduce each new feature in full detail — and those following us on LinkedIn may already have caught a glimpse of what is about to change.

getfairdairy.nl just got a whole new look. We think it explains better who we are, what we do, and where we think we add value. But value is more than a nicely framed set of words. Anyone can make promises; we would rather show it.

Market Data. One of the pieces we spent the most time on. In our Market Data section you will find an overview of 13 publicly available datasets that we use for our analysis. Instead of dumping them into one big folder of favourites, we put our own look and feel over them. We think they are now easier to navigate, to understand and to use. We will quote from them in our reports, we use them to put a foundation under our analysis, and we hope they help you get a better read on the market yourself. We will keep adding datasets, as long as they are publicly available and free for us to publish. If we don't pay for them, neither do you. Free to use, no sign-up, no paywall. The only thing we hope for is that when you need help executing a trade, you think of us.

GFD Insights. Our second dataset comes from something nobody else in the industry has: our own book. Via GFD Insights you can now look back at the trades we have done over the past years — over 300,000 MT of data, available to everyone who follows us. Compare it to your own numbers, hold it against the official quotations, and see how our market can sometimes give you a better read than quotations built on surveys and phone calls. Our trade book is 100% backed by our own trades and represents roughly 80% of everything we brokered over the past year. What we leave out, we leave out for privacy or other reasons that make it unpublishable. Everything else goes in, with a delay of roughly 48 hours after confirmation. The Broker Book sits alongside it: a representation of the bids and offers we carry through the week, because sometimes a bid-ask spread tells you more than a single trade does. We keep the two books separated and publish both with the same delay. With GFD Insights you are as close to our market as we think anyone can get from the outside. And again — free of charge.

The Dashboard. Our third feature is where you get to sit in the driver's seat. Via the Dashboard you get real-time access to our live bid-ask book, product by product. Read our short WhatsApp updates, follow what is happening on the marketplace, catch the community news, see where we hear spot liquids are trading, benchmark your purchases and sales against our books, and calculate your cost of carry when you need it. Give us a few months to get every dial in the cockpit running on all cylinders, but this is where we think our value will sit. Everyone receiving our emails should be able to take a look. And again: no cost, no paywall.

And then our marketplace. Not a new feature, but a rarely used one. Getting activity on the GFD Market Place has been a challenge — as it has been for every one of our competitors. We have plenty of partners willing to participate, but very few who dare to put their prices on it. By adding Twan Swanen to the team, we think that momentum is about to change. Where we as brokers add expertise, a human connection and the ability to help you read the market, the marketplace adds efficiency, range and speed. And sometimes thats all your trade needs. Twan will focus on getting our partners set up properly and participation up. Interested? Get your account via twan@getfairdairy.nl. Already set up but want some guidance? Same address.

Last but not least: we also have an AI agent. You will find it in the bottom corner of our screen. Just don't ask it to trade for you. Our AI has no ambition to connect our partners — that is a different cow altogether. But ask it anything about our datasets and it will give you a clear answer. What was the Dutch quotation in week 18? It knows. What did GFD trade on powders in June? It knows. Whats Wouters favorite food... It knows. It won't replace an analyst, it won't replace a broker, and it certainly won't replace us for a good conversation. Just honest, friendly answers to straightforward questions.

Final Note

We hope the new features are to your liking. For some it will be more than they need; for others it will be nothing more than another tab in an already overcrowded browser. But we aim to add value for most of the 1,200 daily readers of this newsletter. Over the coming weeks we will work on getting a sharper view of the market and share our outlook and findings as we go. Good to be back at it — and if there is anything you want to discuss with anyone on the team, get in touch.

GFD, Good trading 🤝