December’s dairy market presents contrasting trends. While SMP markets remain stable, butter prices are expected to experience significant movement in the coming months. The market is entering a crucial transition period, moving past seasonal production lows. As milk availability increases, the path forward for butter prices remains uncertain, with several factors potentially creating volatility.
Butter Prices Set for Decline, But Not Without Challenges
While butter prices are expected to drop in Q1 and Q2 of 2025, the road to lower levels may not be straightforward. Regional price gaps remain unusually large, and producers are hesitant to adjust prices quickly despite improving cream availability. As we near key budgeted levels, buyer interest may increase, but it remains to be seen how demand will respond.
Stable SMP and WMP Markets
SMP continues to trade at familiar levels, with EU origin remaining competitive in global markets. However, price support is limited, and European markets may require a decline in New Zealand volumes to gain traction. WMP, on the other hand, is influenced by declining butter prices, which could shift production decisions in the coming months.
What Does This Mean for the Butter Market?
The butter market is set for lower prices, but how quickly it gets there—and how demand responds—remains uncertain. With regional price shifts and hesitant producers, the journey could be bumpy.
Stay ahead of the market and track these trends with Vesper’s real-time updates. Sign up for a free trial and get access to exclusive market insights.
