Report 13 – Released on March 26, 2020

Butter prices in Western Europe are lower. Germany has the highest prices, which is typical. Netherlands, France, and Belgium follow. There is unusually limited information available as to butter pricing in Italy. The extreme impact of covid-19 in Italy is believed to have disrupted normal market functioning there in recent weeks. Butte roil prices are lower.

With current milk production believed to be ahead of last year at this time, cream seems readily available for churning. This is further enhanced by the COVID-19 consumer impact of more milk production going to meet increased fluid milk demand, which results in more cream.Finally, manufacturers have reduced production of bulk butter due to weaker demand for it.

Western European dairy officials say these factors explain the lower butter prices – even with more demand for packaged butter.

Another factor weakening butter prices is said to be recent efforts by some EU member states to partially back off traditionally open EU member state borders. This has resulted in delays in moving butter across some internal EU borders. The back-up contributes to weaker pricing. The weaker pricing has caused some alarm. A leading European dairy association has now asked the European Commission to open PSA (Private Storage Aid) for butter. PSA is assistance to help cover the cost of storing butter. The reason cited is COVID-19 weakening demand and prices.

Consumer demand for packaged butter in Western Europe is strong. Some observers describe the demand as very extensive. Orders are called exceptionally high. Recent closures of schools,shops and universities has shifted consumption into homes. In some areas demand for packaged butter is reported to exceed supply. The market for block butter is described as calm.

Churning has shifted toward generating packaged butter. Little new bulk butter contracting is underway. In part, this is because sellers and buyers have different price expectations and most buyers are covered for short term needs.

 Western Europe, 82% Butterfat, Free on Board - Port Butter
     Price Range - $/MT:                          3,050 - 3,900


     Western Europe, 99% Butterfat, Free on Board - Port Butteroil
     Price Range - $/MT:                          3,750 - 4,150


     Information for the period March 16 - 27, 2020, issued biweekly

Secondary Sourced Information:

Butter exports from the EU during January 2020, 17,739 MT, increased 66 percent from January 2019, according to Eurostat. Butter exports to the United States, 2,876 MT, were +8 percent. Butter exports to Saudi Arabia, 1,893 MT, increased over four times. Butter xports to Morocco, 1,226 MT, increased over three times.

Published by:
     Dairy Market News - Madison, WI
     Eric Graf, 608.422.8590
     Email: Eric.Graf@usda.gov

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