Butter prices slumped to a three-year low in Europe this week.

On European dairy markets, butter prices reported by the Dutch Dairy Board fell 3% in the last week to €3,680/t.

This is the weakest price level for European butter since August 2016.

On spot markets, butter prices are trading even lower at €3,550/t.

Meanwhile, milk production in the Netherlands continues to decline.

Figures published this week show May milk production in the Netherlands was down 2.5% on the same month last year to just under 1.2bn litres.

In the first five months of 2019 (Jan-May), Dutch milk production is down almost 3% year on year at 5.6bn litres.

On the other side of the world, New Zealand dairy farmers shrugged off increasing environmental pressures and intensified regulatory scrutiny to post a very strong year of milk production for the 2018/19 milking season, which ran from June 2018 to May 2019.

Figures released last week by the New Zealand dairy industry show milk production for May, the final month of the 2018/19 season, stood at 840m litres, which was in line with the same month last year.

This brings New Zealand milk production for the entire season to 21.1bn litres, which is more than 2%, or almost 460m litres, ahead of the previous milking season. For the upcoming 2019/20 milking season, early forecasts suggest New Zealand milk production will fall slightly by circa 1%.