The global butter market is experiencing a significant downturn as prices fall across all major regions, with European butter leading the decline amid a substantial supply surplus.

Buyers gain upper hand in post-holiday trading

Market dynamics have shifted decisively in favor of buyers as trading activity ramps up following the holiday period. The EU Vesper Price Index for butter dropped to €6,700 | $7,793/mt ($3.53/lb) EXW on August 27, 2025, while Oceania butter sits at €6,190 | $7,200/mt ($3.27/lb) EXW and US butter at €4,246 | $4,938/mt ($2.24/lb) EXW.

However, real-time marketplace activity shows the decline accelerating, with Q4 offers falling from €6,600 to €6,250 in just 24 hours.

European surplus drives price weakness

European butter markets face unprecedented pressure from a substantial supply surplus totaling 56,500mt compared to the first half of 2024. This surplus stems from three key factors:

  • 37,500mt from increased production
  • 6,500mt from reduced exports
  • 12,500mt from higher imports

The improved supply situation has triggered a rapid price decline, with futures trading well below €6,700/mt on the EEX for Q4, Q1, and subsequent periods.

This downward momentum is also visible on the Vesper marketplace, where Q4 butter offers have dropped dramatically from €6,600 yesterday to €6,250 today – a €350/mt decline in just 24 hours.

US and Oceania markets follow downward trend

American butter prices are declining rapidly as churns maintain high activity levels, producing more butter than the domestic market consumes. However, record-high US butter exports, driven by competitive pricing versus global markets, are helping stabilize stock levels despite elevated production.

Oceanian butter prices have shown relative resilience over recent weeks but have begun trading lower due to higher milk prices and declining European prices affecting global benchmarks.

Market outlook remains bearish

The butter market outlook is decidedly weak across all regions due to improved global supply conditions. European and US markets are expected to continue experiencing bearish sentiment in the coming days to weeks, while Oceanian prices may demonstrate better resilience.

The current environment of sellers facing pressure to move inventory while buyers experience no urgency to purchase creates challenging conditions for price recovery in the near term.


This article is part of a longer market analysis. For the full analysis, go to: https://app.vespertool.com/market-analysis/2229