Last year, butter exports from the EU to third countries increased a massive 20% close to 162,250t. The main driver of this growth was surging demand from countries like the US, where exports increased 11% to over 19,000t, and Saudi Arabia, where butter imports from Europe increased 34% to 18,800t.
The result of this strong export activity left European butter stocks extremely tight coming into 2017.
However, the expectation among dairy traders on the continent, who usually sell product six months in advance, was for the increases in EU milk supply to continue. The contraction in milk supply in important countries like Germany and flat production in the Netherlands for the first quarter of 2017 has caught many off guard and added an element of panic to the market on both the buy and sell sides.
The result has seen butter prices soar over recent months, with some saying the market could be overheating. Since early March, European butter prices have moved from just over €4,000/t to €4,700/t by the middle of May. The sharp increase in price has drawn buyers into the market looking to shore up larger volumes of product than usual in fear of further price rises.
But all this has done is drive butter prices even higher. In the last week alone, butter has shot up a further €500/t to more than €5,200/t. Given the tightness in supply right now, the market expectation is for butter prices to continue rising into the back end of the year.
Read more
Farmers push to the 1bn litre mark in May
Butter prices surge 77% on last year
Cream the only thing holding up milk prices – Strathroy
Fonterra raises outlook on milk price
Last year, butter exports from the EU to third countries increased a massive 20% close to 162,250t. The main driver of this growth was surging demand from countries like the US, where exports increased 11% to over 19,000t, and Saudi Arabia, where butter imports from Europe increased 34% to 18,800t.
The result of this strong export activity left European butter stocks extremely tight coming into 2017.
However, the expectation among dairy traders on the continent, who usually sell product six months in advance, was for the increases in EU milk supply to continue. The contraction in milk supply in important countries like Germany and flat production in the Netherlands for the first quarter of 2017 has caught many off guard and added an element of panic to the market on both the buy and sell sides.
The result has seen butter prices soar over recent months, with some saying the market could be overheating. Since early March, European butter prices have moved from just over €4,000/t to €4,700/t by the middle of May. The sharp increase in price has drawn buyers into the market looking to shore up larger volumes of product than usual in fear of further price rises.
But all this has done is drive butter prices even higher. In the last week alone, butter has shot up a further €500/t to more than €5,200/t. Given the tightness in supply right now, the market expectation is for butter prices to continue rising into the back end of the year.
Read more
Farmers push to the 1bn litre mark in May
Butter prices surge 77% on last year
Cream the only thing holding up milk prices – Strathroy
Fonterra raises outlook on milk price
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