As of June 19, 2024, the EU Vesper Price Index (VPI) for butter stands at €6600 ($7088/mt or $3.22/lb) EXW, while the Oceania butter price is at €6797 ($7300/mt or $3.31/lb) EXW. In the US, the VPI for butter is now €6466 ($6945/mt or $3.15/lb) EXW.

The European butter supply remains tight, driving prices higher and failing to meet the high demand. Producers are rarely willing to offer butter products for future dates, even at a premium, indicating low pressure to sell. Many buyers in the European market are short-covered, suggesting that demand will likely remain steady throughout the summer.

The June 18, 2024, GDT event highlighted the ongoing tight supply situation in New Zealand, with butter prices rising to a historic high. However, the upcoming high season in New Zealand may ease these high prices. While the NZ anhydrous milk fat (AMF) prices fell along with an overall 0.5% decline for all GDT products, butter prices rose again. This rise indicates that the relative fat value of AMF to butter has shifted to the point where butter is once again traded at a nominally higher level than AMF.

In the US, the butter market remains slightly bullish, supported by steady domestic demand. The global supply tightness and rising butter prices are forcing buyers to remain covered short, anticipating that increased butter availability from New Zealand’s high season could potentially lead to a decrease in butter prices.

Prices are expected to maintain a slightly bullish trend. This is supported by fundamental factors such as lower production and stocks across most regions, along with steady demand for butter, prices are likely to remain stable or potentially increase in the coming months. The upcoming season in Oceania could impact the longer-term outlook, potentially influencing the market price.

For more butter insights, check out our latest market highlights here.