This is a subscriber-only article
European spot prices for butter continue to be volatile, with prices moving sharply up and down in the last week. Since the start of February, European butter prices increased sharply in both physical spot markets and futures markets.
Fears of another supply shortage saw spot prices peak above €5,000/t last week, while futures prices to the end of June 2018 rose to highs of just under €5,200/t. However, markets retreated last Friday, with futures prices for June delivery falling back to less than €4,800/t.
It seems dairy buyers are caught in two minds when it comes to butter. European milk production remains strong, but buyers are wary of being caught short for supplies, with last year’s spike in butter prices still fresh in the memory.
Milk production
Figures are starting to emerge across Europe for milk production in January from each member state. In the Netherlands, dairy farmers produced just under 1.2bn litres of milk for January, which was relatively flat (+0.2%) compared with the same month last year.
Final figures for 2017 show Dutch dairy farmers produced 13.8bn litres of milk last year, which was flat compared with 2016 milk production.
In the UK, January milk collections from dairy farms totalled 1.19bn litres, which was down almost 2% compared with the same month last year. Total milk production from the UK in 2017 came to just over 14.6bn litres last year.
SHARING OPTIONS: