Butter Prices Are Rising in Europe Due to a Milk Shortage

The European dairy market is showing mixed trends: butter prices have risen by €50 per metric ton, whole milk powder has fallen by €25, and skim milk powder remains expensive. A seasonal decline in raw material supply in Europe is driving up processors’ costs, while increased milk production in the U.S. is intensifying competition in the international market.

After several months of decline, the price of butter has begun to recover. The price rose by €50 per metric ton to €3,700.

The price of Cheddar remained stable at €3,800 per metric ton. Meanwhile, whole milk powder fell by €25 per metric ton.

Despite this, skim milk powder is maintaining a high price due to strong demand, remaining close to previous peak levels.

A seasonal decline in production has led to a reduction in milk availability in Europe. As a result, the average price of raw milk on the spot market rose to €0.47 per liter.

The rise in milk prices is placing an additional financial burden on processing companies. They are having to spend more to purchase additional volumes of raw milk for the production of cheese, butter, and dry milk.

In contrast to the European market, the U.S. is seeing an increase in supply. In September, milk supplies in the country rose by approximately 2%.

The increase in U.S. production could intensify competition for European exporters in international markets.

At the same time, U.S. farms are generating additional revenue from the sale of livestock. High prices for calves and culled cows account for up to 20% of farms’ total revenue. On some farms, this revenue stream helps maintain profitability and offset the high costs of milk production.

However, a potential decline in beef prices remains a risk: it could erode farmers’ additional income and slow the growth of raw milk production.

Key Trends in the Dairy Market

• Butter: prices rose by €50 per metric ton—to €3,700—after several months of decline.
• Cheddar: The price remains at €3,800 per metric ton.
• Whole milk powder: prices fell by €25 per metric ton.
• Skim milk powder: High demand is keeping the price near previous highs.
• Raw milk in Europe: The spot price rose to €0.47 per liter due to reduced supply.
• U.S. market: An approximately 2% increase in milk supply in September could intensify competition for European exporters.

Consequently, the European dairy sector is simultaneously facing rising raw material costs and pressure from international competition. Future price trends will depend on milk availability in Europe, demand for dairy products, and production rates in the U.S.

This is according to data from “Infagro.”

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