Butter
Butter takes a nosedive
Europe
Sell side focuses on Q4, buyside looks at 2026
The EU butter price dropped by about 10% compared to early August and the end of the decline is not yet in sight. At the current spot price of EUR 6300 ex works there is simply much more product on offer than on demand. The buyside is far better covered than last year around this time and as the Q1 prices, currently around EUR 6200 ex works, are well within budgets, procurement departments are interested in H1 transactions. The supply side has volumes to sell for Q4 and thus there is quite some butter that still has to find a home.
Americas
Butter price drops to the lowest level in four years
Over the past month the spot price for butter has been steadily dropping and now seems to settle at a price of USD 2.00/lb (4410/t) ex works. We haven’t seen such a low price since October 2021. The availability of cream is so abundant that there is no demand for bulk butter as microfixing doesn’t calculate. This explains why the market didn’t blink an eye when the Cold Storage report indicated a drop in butter inventories. Retail demand remains good and export demand continues to flourish. As all the market fundamentals now seem to have been priced in it is well possible that the current price level will hold for the next several weeks if not months.
Asia-Pacific
Oceania milk fats face quite difficult market circumstances
On GDT the price drop was modest compared to the milk powders, as China easily absorbed the available volumes of butter. Outside GDT there are other buyers and other forces at play, and as the fat prices are declining in the EU and the US as well, the Oceania prices have to follow. The region cannot afford to lose access to the world market. AMF exports suffer nevertheless, as Mexico and other Latin American buyers have been turning to the US, and there are large stocks of Oceanian AMF in the EU already. There is remarkably much US butter being sold in Australia, which puts pressure on the local butter producers over there. This makes the fat side of the Oceania dairy business quite complicated. With the flush around the corner larger production volumes of AMF just cannot be avoided. At the moment, the market prices are USD 7050 for butter and USD 7000 for AMF, both FOB, and there is obvious further downward pressure.
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