Butter prices continue on their upward climb with the latest EU quotations standing at €5,500/t – a surge of 94% on this week last year.

EU average prices of dairy products increased by 9.8% in the last month for butter.

Furthermore, on the world market, butter prices trended further upwards in the last two weeks when expressed in US dollars, particularly in the EU (+3.9%) and Oceania (+3.8%).

Meanwhile, skim milk powder (SMP) prices continue to slide, with prices down 9% in the last four weeks to €1,750/t.

SMP prices year-on-year are up 8%, but a decline in prices started at the beginning of the year, increased slightly in June and are now on a downward trajectory again.

'No recovery in SMP prices'

Conor Mulvihill, director of the Irish Dairy Industries Association (IDIA), said that there has been no recovery in protein prices.

He said that the small sales of SMP in the tender process out of intervention have hit the SMP market.

“Prices were recovering towards €2,000t, they’ve since collapsed to €1,880 with offers in the tender process coming in at €1,750/t.

“Any small recovery that was occurring was knocked out.”

Global Dairy Trade

Meanwhile, at Tuesday’s Global Dairy Trade auction butter prices dropped almost 5% to US$5,747/t (€4,871) and SMP prices fell 3% to US$1,966 (€1,666/t).

Butter prices at the GDT auction had been steadily increasing and last month broke the US$6,000/t mark.

Overall, the GDT price index fell 1.6% at the latest auction having increased by 0.2% at the last one two weeks ago.

Exports

The latest EU data shows that the US, Iran and Saudi Arabia have been the main destinations for EU butter in the period from January to May 2017.

Double-digit growth has been seen in both the US, with a 49% increase, and Iran, with exports up 39%.

EU butter exports also increased to Australia, while they decreased significantly in Saudi Arabia, down 58%, and Egypt down 81%.

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Price disparity between butter and dairy proteins hits record levels

The price disparity between protein and fat milk constituents has hit record levels the latest EU data shows, with a huge gap between butter and SMP prices.