This is a subscriber-only article
Butter prices have surged 77% on May 2016, with prices at record levels of €450/100kg, the latest data from the EU shows.
Given the solid demand for the product, stocks have increased but levels remain below normal.
Demand for dairy fats is on the increase in general, with good demand for cheese and whole milk powder (WMP).
There have been no sales in 2017 of skim milk powder (SMP), the byproduct of butter, out of the public intervention system, the purpose of which was to store excess product off the market.
There continues to be over 300,000t of SMP in intervention from last year.
After a fall-off in offers to the measure in the back-end of last year, member states began putting SMP back into intervention in April.
To date in 2017, 7,635t of product has been placed in the measure.
The market is hopeful that if little or no volume of SMP heads into intervention between now and the drying-off period for European farmers, then the market for butter should remain strong.
The EU dairy market continues to be characterised by price difference between fat and protein. Should high butter prices and SMP prices remain stagnant, milk prices look set to hold firm.
Farmers push to the 1bn litre mark in May
Is there a butter shortage on the cards?
SHARING OPTIONS: