EEX Hands Its Dairy Market To CME: Europe Makes 10.8 Million Tonnes Of Cheese And Cannot Hedge Any Of It

I nearly filed this one as exchange plumbing. Then I checked what Europe can actually hedge. Europe made 10.8 million tonnes of cheese in 2024. Not one tonne of it has a futures contract behind it.

What the two exchanges agreed

On 8 September, CME Group and the European Energy Exchange announced a deal. EEX will hand its European dairy business to CME Group. It will phase the business out. The price indexes that sit under its futures move across before the end of 2027. CME then plans to launch its own European dairy indexes, futures and options.

The deal covers the pan-European butter and skimmed milk powder indexes. Trading at EEX stays open for the maturities already listed. Nothing changes yet for the butter index or the weekly cheese indexes. The deal still has closing conditions to meet. EEX said it wants to put its focus back on power and energy.

CME called Europe one of the largest dairy markets in the world. It said US dairy volumes have grown 73% in five years. Open interest in its dairy market hit a record 434,071 contracts on 1 September.

Europe prices its cheese by hand

Here is the part most of the coverage skipped. EEX lists futures on butter, skimmed milk powder, whey powder and liquid milk. It lists none on cheese.

The exchange does publish four weekly cheese indexes. They cover cheddar curd, mild cheddar, young gouda and mozzarella. They come out on Wednesdays, built from prices that physical traders send in. EEX throws out any price more than 5% off the first average, then averages what is left. Assessments from Germany, France and the Netherlands feed the number.

So Europe has a weekly cheese price and no way to lock one in.

Half of Europe's milk goes into cheese

That gap is wider than it looks. Eurostat says EU farms sent 150.8 million tonnes of milk to dairies in 2024. Cheese took 59.9 million tonnes of whole milk and 17.0 million tonnes of skimmed milk. That is 76.9 million tonnes, or close to half the pool. It made 10.8 million tonnes of cheese. Germany made 22.5% of that and France 17.8%.

The United States made a record 14.66 billion pounds in 2025, or roughly 6.6 million tonnes. Europe is the bigger cheese maker by a wide margin, and it is the one with no cheese contract.

What CME brings to the table

CME already runs the US dairy set. That is Class III milk, cash-settled cheese, dry whey, Class IV milk, nonfat dry milk and butter. Every one of them settles against a published USDA price. That last detail is the whole trick. A futures contract needs a price nobody in the room can argue with.

Europe has that for butter and for powder. The four cheese indexes were built the same way, with a written method and a rule for outliers. They have run since 2021. The raw material for a contract is therefore already on the shelf.

Only four cheeses pass the test

Europe's block sits in the product rather than the venue. A contract needs one grade that means the same thing in every cold store. Cheddar curd, mild cheddar, young gouda and mozzarella clear that bar. Most European cheese does not.

Protected names, regional styles and own-label recipes all differ a little. You cannot settle a contract on a cheese that one plant makes to one buyer's recipe. So the pool that could be hedged is far smaller than 10.8 million tonnes. Nobody publishes how much smaller. That missing number decides whether a European cheese contract ever gets liquid.

Who carries the risk today

European cheese makers handle price risk three ways now. They sign fixed annual deals with the shops. They hedge the milk instead of the cheese. Or they simply wear it.

Hedging the milk is the common workaround, and it only half works. Butter and powder contracts track fat and protein. A cheese margin lives on the gap between what the milk costs and what the cheese fetches. Cover one leg and the other stays open. A bad year in cheese still lands in full on the plant that made it.

Do the counting now. Add up the tonnes you sell at a floating price. Sort them into the four index grades and everything else. Ask your bank what it would cost to cover each pile today. Ask your buyer why the annual deal is priced the way it is. Firms that answer those before 2027 will be first through the door.

Cheese makers and buyers now face one commercial test. How many of your tonnes sit in a grade the market can price? That is a volume question, and it is answered type by type and country by country. Zenith's Global Cheese Database 2026 measures cheddar, mozzarella, gouda and 36 more types across 48 markets. Every figure is in tonnes, with 2025 actuals and forecasts to 2030. Waitlist members get a free sample country chapter.