Dairy Trends: bad week for dairy markets as butter and skim falls

It wasn’t a good week for European dairy markets with falls across the board in all key product categories.

Butter took one of the biggest hits, falling in price by €275/t and now sits just above €3,600/t which is one of the lowest prices recorded for European butter since before 2021.

Other commodities also fell in price this week in Europe, but to a lower degree than butter.

Taking a step back, confidence seems to be sucked out of the market at present as higher than expected milk supply forecasts continue to roll in and the war in the Middle East, rather than resolving itself, seems to be worsening.

With the blockage of the Strait of Hormuz, a key supply channel to the Gulf countries is shut off and this is definitely affecting dairy demand.

Of particular note is the price drops for skim milk powder (SMP), which fell this week by €50/t to €3,350/t. Does this spell the end of the SMP rally which has been the most sustained price increase since 2021?

Time will tell, but the current falls are coming at the wrong time for Irish co-ops, with stores full of powder, butter and cheese after the spring peak.

While Ireland recorded a 3% decline in milk supply during April, other countries less impacted by weather continue to drive on, particularly Germany and to a lesser degree France.

For the month of April, German milk supply was up 6% compared to the same month in 2025.

France also recorded an increase in April, registering a 1.1% increase over 2025, which indicates a big slowdown in French production compared to where it was, but growth is growth.