Europe’s butter market continues to heat up as supply remains very tight across the continent.

In the last week, European spot prices for butter have risen to €3,150/t – their strongest level since late March. Irish co-ops, which are some of the largest manufacturers of butter in Europe, are reporting market prices around €3,300/t and higher.

As reported last week, Irish butter prices could be set to rise very strongly over the coming weeks, with European dairy buyers reporting acute shortages of bulk butter.

The spike in supermarket sales in March and April due to consumer pantry loading during the COVID-19 lockdown has had the knock-on effect of clearing a huge volume of the stocks of butter in cold stores across Europe.

Added to this, the easing of lockdown restrictions means additional demand for butter is coming from food service and hospitality industry customers preparing to reopen for business.

Elsewhere, it’s been a contrasting week for other dairy commodities. On cheese markets, the recent run of price rises has drawn to a halt. Spot prices for cheddar dropped back slightly this week to €3,100/t, while mozzarella prices steadied at €2,750/t.

On the powder side, the price of skimmed milk powder (SMP) was back slightly this week to €2,180/t. In contrast, European prices for whole milk powder (WMP) increased to just under €2,700/t.

Meanwhile, the EU’s private storage scheme shows that 13,200t of SMP and almost 55,000t of butter have been placed in storage since early May.