The European butter market is facing renewed pressure this summer as prices edge below the €7000/mt mark and trade activity remains subdued. Sellers are taking a cautious stance, with many choosing not to lower prices further, hoping that demand will pick up again in August.
Current price levels are not just a result of seasonal demand, but also reflect a broader shift in supply dynamics. Higher production, increased imports, and slower-than-expected exports have left the market well stocked. Cream prices across Europe have fallen to around €7850/mt, pointing to a butter cost price closer to €6600/mt, yet many sellers are holding back from pricing that low.
While butter has not responded as directly to recent macroeconomic shifts as other dairy categories, it’s worth noting that the EUR/USD exchange rate movement, from 1.17 to 1.15, has impacted related markets like SMP, where European offers below €2300/mt quickly disappeared. Although butter pricing is less sensitive to currency shifts, these broader financial changes may still influence trade behaviour in the weeks ahead.
In the US, strong milk production and inventory data briefly pushed butter prices down, before a lower-than-expected stock report led to a quick rebound. Export activity continues to provide solid support to the US market. Meanwhile, in Oceania, butter prices are holding steady, though the approaching milk production season is expected to bring additional volumes to global markets.
Overall, butter prices remain under pressure, with supply and seasonality playing a larger role than external demand triggers. Market players are watching closely to see if August brings renewed buying activity to stabilize pricing.
Read the full market analysis on butter here: https://app.vespertool.com/market-analysis/2144
