The record spikes in the price of butter over the last year are being felt by consumers, as retail sales and trade of butter have fallen sharply in some important markets.

In Germany, which is far and away Ireland’s most important export market for butter, retail sales of butter fell 11% in May. That’s a drop in sales of some 2,300t compared with the same month last year.

In the first five months of 2018 (Jan-May), German retail sales of butter are down more than 9% year on year, or 10,400t, to just under 104,000t.

If we take the 12-month period to May 2018, which includes September last year when butter prices soared above €7,000/t, butter retail sales in Germany are back 25,000t year on year – a drop of 9%. In France and the UK, retail sales of butter are reportedly back 4% in recent months.

Butter is currently trading at €5,500/t on European spot markets, with prices falling sharply in the last week by €300/t.

While butter markets are in retreat, with spot prices down more than €600/t in the last month, it was inevitable prices would have to begin normalising before Europe’s butter market overheated.

In a historical context, butter priced above €5,000/t is exceptionally strong. Sellers will hope that European retail sales will revive in the coming months, with butter markets returning to more affordable levels. Suppliers are hoping the current heatwave in parts of Europe will curtail supplies of cream and stabilise butter markets.

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