EU butter prices plunge to three-year low

European butter prices have fallen sharply again this week, with spot prices dropping €115 per ton to €3,835/t, marking the lowest level since 2021.

The moderate post-Christmas recovery in butter trade appears to have been short-lived, as the large global supply continues to weigh on the market.

Other dairy products have shown more stability. Prices for cheese and whole milk powder (WMP) rose slightly, while skimmed milk powder (SMP) saw more sustained growth, increasing by €70/t to €2,145/t. Although this rise remains relatively low in historical terms, it indicates renewed buyer interest in skimmed milk powder.

Export activity is supporting the SMP market, with European shipments reportedly running well ahead of last year’s levels. Buyers remain active when prices are competitive, suggesting that underlying demand for dairy proteins remains stable. At the Gulfood exhibition in Dubai, industry representatives noted an overall positive tone around dairy proteins, though many buyers were cautious and refrained from large commitments due to uncertainty over near-term price direction. Market sentiment for the second quarter appeared more optimistic.

Meanwhile, high global milk production continues to pressure dairy markets. Data from New Zealand showed that December production rose 2.45% year-on-year, adding to supply-side pressure. However, concerns are emerging that conditions could tighten later in the season, as El Niño-induced dryness threatens pastures and may constrain milk volumes in the coming months. Overall, while protein demand remains supportive, the balance of strong global supply and cautious buyer behavior continues to keep dairy markets under pressure.

Tags: EU, prices, butter