There has been a lot of talk over the last few weeks about a softening in the dairy market and the impact it’s going to have on Irish milk prices.

Talking to a dairy co-op CEO over the last few days, he says that milk prices are ahead of the market by 1c/l to 2c/l at present.

There is no doubt that butter prices have come off their peak. This week, European butter is trading at €6,990/t, which is down a long way from the peak of prices in November last year when it hit €8,165/t.

ADVERTISEMENT

However, it has been a steady decline and butter this week is still marginally ahead of where it was in February 2025, so it has been prone to fluctuation this year.

Butter dropped by €25/t this week, but that drop was offset somewhat by increases in the price of powders, with whole milk powder (WMP) increasing by €40/t and skim milk powder (SMP) increasing by €20/t.

There wasn’t the same good news for cheddar cheese, which dropped in price by €25/t.

US production

Milk production in the US is now a bigger threat as it’s really after ramping up, with a 3.4% increase in supply in June on top of a 2.4% increase in May.

With severe trade tensions with China, the proportion of US dairy exports that were going to China are now finding different homes and I see there’s some of that making its way into Europe. Trump will be happy.

Milk supplies in Britain are also up, with the Agriculture and Horticulture Development Board reporting a 5.7% increase in milk deliveries for June 2025 compared with June 2024.