May 22, 2025 – Weekly Market Analysis

The global dairy commodity markets remain in a holding pattern this week, with prices continuing to stabilize within established ranges. The latest Vesper Price Index (VPI) data confirms that market participants are maintaining a cautious approach as uncertainty persists about second-half market trends.

Market Highlights

  • Butter markets hold steady at €7,200/mt ($8,151/mt) in Europe, with rising cream prices due to warmer weather affecting milk fat content
  • SMP prices retreated to €2,380/mt ($2,694/mt) after briefly flirting with higher levels, as additional sellers entered the market
  • WMP markets remain quiet with decreased European demand at €4,250/mt ($4,811/mt), while Oceania continues trading at premium levels

Regional price dynamics

European butter demand remains strong at the €7,000-€7,100/mt level, while cream prices have increased as higher temperatures across Europe impact milk fat content in delivered volumes. Meanwhile, SMP briefly tested higher territory before retreating as sellers emerged at the €2,400/mt threshold.

US butter prices continue offering exceptional value compared to European and Oceanian markets, with abundant cream availability driving increased production and building inventories. SMP in the US has found support from increased Mexican export demand, driven by heat-related production declines.

The latest GDT auction event (20/05/2025) saw Oceanian SMP prices fall to $2,900/mt for C2 product, down from $2,990/mt in the previous auction, indicating slightly softer demand.

Market outlook

The current market stalemate reflects a delicate balance between supply and demand fundamentals. With neither side experiencing significant stock pressure and continued uncertainty about second-half market conditions, most buyers and sellers are adopting a cautious, stepwise approach to procurement and sales.

Forward butter prices remain essentially flat through year-end, confirming the uncertain sentiment pervading European dairy markets. Meanwhile, regulatory changes loom on the horizon as European governments consider combining agricultural and defense spending.

For comprehensive market analysis, including detailed price trends and regional insights for butter, SMP, and WMP markets, read our full weekly market report on the Vesper platform here: https://app.vespertool.com/market-analysis/1954