Dairy commodity markets have entered a calmer phase at the start of Q2, with the arrival of the flush season adding pressure to butter, SMP, and WMP prices across Europe and New Zealand.

Butter spot prices fall sharply from Q1 highs

European spot butter prices dropped sharply through March, a move that reflects a clear shift in market sentiment. Cream is cheap relative to butter, production is running heavy, and traders have significant volumes in storage. Buyers, having covered positions well into late 2026, are in no hurry to step in at current spot levels.

US butter prices rose modestly during March before giving back gains, with production growing 9.77% year on year and requiring export outlets to relieve stock pressure. New Zealand butter and AMF prices also weakened this week as the global surplus reduced urgency to lock in forward volumes.

The GDT event this week confirmed the softer tone, reflecting slightly weaker markets at the start of the flush period.

SMP: demand eases at higher price levels

SMP prices have pulled back from their recent peak in Europe and New Zealand. Export demand from EU SMP has weakened at current price levels, with a strong euro adding a further headwind for buyers outside the eurozone. European SMP production is running very high, as the significant premium of SMP over SMC has led many producers to reopen older drying towers. The timing of that additional supply coincides with weakening export demand, making the near-term picture difficult.

In New Zealand, the 2025/26 milk season is winding down, but demand is not at a level to support prices seen in recent weeks. The GDT confirmed the direction: EU C2 Medium Heat SMP fell 5.3% and NZ prices declined 1.13%.

US NFDM markets remain tighter, with prices continuing to edge higher despite climbing production.

WMP: caught between two falling markets

European WMP prices fell sharply on this week’s GDT event, while NZ prices held broadly steady as limited demand favoured the cheaper Oceania origin. With both butter and SMP heading lower, WMP is finding it difficult to hold up independently. At peak season, a larger proportion of available milk flows toward WMP production, adding to the volume in the market.

For the full whey protein forecast, visit: https://app.vespertool.com/market-analysis/2871