Butter prices surge to record high

The trading price of butter has reached a new record this week. The leading butter and cream prices for Northwest Europe, set weekly by DCA Market Intelligence, have seen significant increases in recent weeks. With the holiday season approaching, it seems the market has not yet reached its peak.

The numerous outbreaks of bluetongue disease in Europe have injected a lot of volatility into the dairy market. This week, the DCA Benchmark Price for butter has risen by nearly €300 to €7,935 per ton. To put this into perspective, the value of a truckload of 25 tons of butter now approaches €200,000. This surpasses the previous record set in 2022. Similarly, the DCA Benchmark Price for cream is climbing rapidly, reaching €9,845 per ton. Nearly €1,000 per ton higher than the previous record from 2022. That year, many commodity prices soared due to the onset of the war in Ukraine.

Concerns about the bluetongue virus are gripping the dairy market. In recent weeks, the virus has spread exponentially across the Netherlands, Belgium, and Germany. Outbreaks have also been reported in France, Denmark, and the United Kingdom. Infected cows often experience a halving or even more significant reduction in milk production. Vaccinations provide only partial protection.

Although it is still difficult to make a precise estimate, initial signals picked up by DCA Market Intelligence indicate a significant decline in milk production in affected countries. This has driven butter prices to their current extremely high levels. This impact will also be noticeable on store shelves with a few months' delay. A decrease in butter prices is not expected. Seasonally, the DCA Benchmark Prices for butter and cream typically rise during the fall due to increased demand for the Christmas season.