The global butter market is facing a significant downturn due to a drop in prices across all major regions. Image source: Pixabay
The global butter market is facing a significant downturn due to a drop in prices across all major regions, with European butter leading the decline due to a supply surplus, according to a report by commodity platform Vesper.
With a supply surplus of 56,500 tonnes compared to the first half of 2024, European butter prices had dropped to €6,700 (US$7,793)/tonne on the Vesper Price Index, the 28 August report said.
However, real-time marketplace activity showed a further decline in prices, with fourth quarter offers dropping from €6,600 (US$7,739) to €6,250 (US$7,329) in 24 hours, Vesper wrote.
Oceania butter remained at €6,190 ($7,200)/tonne and US butter at €4,246 (US$4,938)/tonne on the Vesper Price Index.
Market dynamics had shifted in favour of buyers as trading activity ramped up following the holiday period, the report said.
According to the report, the European supply surplus was due to three key factors:
37,500 tonnes from increased production6,500 tonnes from reduced exports12,500 tonnes from higher imports
In the USA, butter prices are declining rapidly as churns maintain high activity levels, producing more butter than the domestic market consumes, according to the report.
However, record US butter exports – driven by competitive pricing compared to global markets – had helped stabilise stock levels despite increased production.
“Oceanian butter prices have shown relative resilience over recent weeks but have begun trading lower due to higher milk prices and declining European prices affecting global benchmarks,” Vesper wrote.
“The current environment of sellers facing pressure to move inventory while buyers experience no urgency to purchase creates challenging conditions for price recovery in the near term.”