Butter and milk powder markets are moving in opposite directions, with heavy milk flows pressuring butterfat across Europe, the United States and New Zealand, while US NFDM hit a record on the CME Spot Call and pulled global SMP higher.

US CME Spot Call Nonfat Dry Milk reached USD 2.215/lb, or USD 4,883/mt, on Tuesday, the highest price ever recorded on that benchmark. The strength reflects the supply shortage that built through Q4 and early Q1 as other milk streams pulled skimmed milk away from NFDM. Milk powder production is now running high in California as an earlier seasonal peak kicks in, which is expected to help balance supply over time.

This week’s GDT auction confirmed the direction. NZ C2 butter fell USD 585/mt while EU C2 butter fell USD 30/mt. The weakness in butter reflects heavy milk flows globally and soft cream markets across Western Europe. At current cream levels, according to Vesper analysis, butter production costs open the door for further price declines in the coming weeks.

European buyers have locked in significant amounts of butter since prices dropped in late 2025, with many covered well into 2027. That creates a mismatch, with selling pressure concentrated in Q2 while the buying interest sits further out on the curve.

US butter production is running 9.7% above 2025 year to date, which pushes the need for exports. US butter currently trades at the bottom of the global price range. NZ butter is feeling the pressure from weaker European markets and the 9.4% year on year milk solids surplus published for March.

For SMP, the EU and NZ picture has brightened. European milk powder had been trading slightly lower on a weaker US dollar that made EU SMP less competitive on export, but the EUR/USD rate has stabilised and the large US NFDM premium has created room for EU and NZ SMP to move up. EU28 exported 9.89% more SMP year on year in January to February, although early indications suggest export volumes have been lower in March and April.

WMP remains broadly sideways in Europe and New Zealand. Fat and protein price moves are pulling in opposite directions and keeping fair value stable. NZ WMP dropped only slightly at the latest GDT event, with Chinese demand holding firm. China is producing more WMP domestically, although the recent detection of foot-and-mouth disease in China may have played a role in recent demand patterns.


For real-time butter spot prices and butter price forecasts, visit: app.vespertool.com