Global dairy markets are tightening. A common thread across butter, skim milk powder (SMP), and whole milk powder (WMP) markets is a lack of available offers, not because production is struggling, but because sellers across all three producing regions are either exporting aggressively or holding product for later in the year.

Butter: exports up but fundamentals stay complex

The EU Vesper Price Index for butter stands at €4,300/mt EXW as of February 25. Oceania butter is priced at €5,427/mt EXW, and US butter at €3,383/mt EXW.

Prices are edging upward in all major producing regions. European butter exports are up 25.5% compared to the same period last year in the first eight weeks of 2026, with Asian buyers actively preferring EU butter over New Zealand product, given a significant price discount for EU butter. However, the additional export volume, estimated at around 3,500 mt per month above last year, remains well below the additional butter production currently taking place in Europe.

At the same time, cream is trading cheaply across Europe at around €4,000–4,300/mt, and at approximately $1.8/lb in the US, which is keeping a ceiling on how far butter prices can move. US butter stocks in January were down 17% compared to a year ago, which is consistent with the reported scarcity of offers.

SMP: US tightness sparks broader market move

The EU Vesper Price Index for SMP increased to €2,500/mt EXW. Oceania SMP is at €2,569/mt EXW, and US NFDM/SMP stands at €2,823/mt EXW.

The US market has been a key driver of the recent SMP rally, with two consecutive weeks of price increases. While the initial move was described as driven by a short squeeze, genuine supply tightness has since provided more fundamental support. Buyers who had been hesitant are now locking in volumes.

EU SMP remains the most competitively priced origin globally as of late February, supporting strong export performance into Asia. At the February 24 GDT Pulse event, SMP prices broke the $3,000/mt barrier, driven by demand from Asian countries including China.

On the supply side, SMP production in key EU countries including Ireland and Germany has grown faster than overall milk output, reflecting a deliberate shift of milk toward powder. Oceanian SMP markets have continued to firm across recent GDT events, with seasonally declining New Zealand milk volumes expected to reduce available export supply further in the coming months.

WMP: fat and powder side both providing support

The EU Vesper Price Index for WMP increased to €3,300/mt EXW, while Oceania WMP is priced at €3,103/mt EXW.

European WMP is being offered on a forward basis well above current spot levels. Prices are moving up in the wake of gains in both butter and SMP, which have created a higher fair-value reference for European WMP. New Zealand sets the tone for global WMP markets, and NZ WMP prices have been moving steadily higher since the start of the year as declining milk volumes reduce export availability. Lower cocoa prices were also noted as creating a more favorable environment for chocolate consumption, which increases demand for milk powders.



This newsarticle is part of a more comprehensive market analysis. For the full analysis, visit: https://app.vespertool.com/market-analysis/2751