Increase in butter prices in the EU

By September 29, the price of European butter had reached a record high of $8,706 per metric ton, up 83% from a year earlier. Butter prices have skyrocketed in recent months, setting new records in EU.

This poses significant challenges for bakers and confectioners, who already face problems making chocolate, Reuters reports. Analysts attribute this to high demand for butter, limited supplies and the desire of dairy companies to use more milk for more profitable products such as cheese.

According to the latest official data from the European Commission, global markets European butter set a record ($8,706 per metric ton as of September 29), up 83% from a year earlier. Prices were also higher year-on-year in Australia and New Zealand.

Paul Boivin, director of the French Federation of Bakers and Confectioners FEB, notes that large food companies have already secured most of their butter suppliesBut small producers will be significantly affected as price increases are inevitable.

Last year Milk production fell in most countries around the world, including Europe, the United States and New Zealand, the world's largest exporter of milk and butter.. This was due to low prices and high feed costs, which discouraged many dairy farmers.

Global milk production has recovered slightly in 2024, but remains limited compared to growing demand. This has prompted producers to focus on more competitive products such as cheese, said Rabobank analyst Michael Harvey.

Milk production in the EU rose by 0.7% between January 2023 and July 2024, according to the latest EU data. Over the same period, butter production fell 1.6% and butter inventories reached historic lows. Cheese production, on the contrary, increased by 3.2%.

The U.S. Department of Agriculture this month raised its forecast for U.S. butter prices in 2024 to $3 a pound, 15 percent higher than last year. This is due to reduction in the number of cows and, as a result, less milk produced each year.

“Reduced milk supplies and persistent demand are expected to lead to projected price increases through 2025“, said the US Department of Agriculture. Global butter market revenue is expected to reach $42 billion in 2024, up more than 8% from 2022, according to data platform Statista. The market price is expected to increase by 7% annually until 2029.

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