After a brief pause last week, butter and cheddar prices jumped again this week.

Butter values pushed further into record territory, increasing by €105/t to €8,120/t and there was an even higher increase per tonne of €145 to €5,275/t, which is still some way off the record price of €5,660/t set in 2022.

Milk powder prices remain well below their 2022 levels, but they too posted modest price increases this week, with WMP increasing by €15/t to €4,365/t and SMP, where prices have lagged behind the rest of the dairy industry, increasing by €10/t to €2,585/t.

Next week’s GDT auction is awaited with interest to see how they respond in relation to the continued increase in butter and cheddar values.

The rising values, particularly for butter and cheddar, in Europe have been achieved against the backdrop of a particularly weak Chinese market in 2024.

In August, China’s butter imports fell 23% compared with the same month last year, while cheese imports were down 20%.

This is very much due to rapid expansion in China’s dairy industry, which achieved its growth ambitions ahead of target and is now over supplied and, as a result, is looking to export milk powders to utilise the surplus.

In the US, milk supply has stabilised, with a marginal increase in August of 0.1% to 8.19m tonnes, the equivalent of 7.2m litres. This follows declines earlier in the year, with avian influenza being a problem on some dairy farms, particularly in California, the largest dairy-producing state in the US.