It was another positive week on the dairy scene, with European butter prices exceeding the €8,000/t mark for the first time ever.

To put the scale of the European butter price in context, the Global Dairy Trade (GDT) auction price for butter this week was €5,885/t which is €2,130/t lower.

It just shows the scale of the shortage of butter and cream in Europe.

It also indicates that the high price probably won’t last that long, although distance, tariffs and transport are issues for those looking to export butter to Europe.

The GDT increased at this week’s auction by 0.8%, with falls for butter and anhydrous milk fat, but gains of 2.9% for cheddar, 2.2% for skim milk powder (SMP) and 1.5% for whole milk powder (WMP).

Relative to European prices, there is a big gap in the GDT. Cheddar is €5,130/t in Europe and €3,992/t at the GDT. WMP is €4,350/t in Europe, a fall of €15/t this week, but still €1,251/t higher than the GDT price.

On SMP, the price in Europe is €2,575/t, while it is similar at the GDT at €2,525/t.

Overall, the price differences show the big premium being paid for dairy in Europe compared to the rest of the world. That used to be the norm long ago, but is less common now.

The amount of product traded at the GDT was over 38,800t, which is the highest quantity traded since September 2019. This shows good demand for dairy globally, even though China is still largely out of the market and likely to remain out for the foreseeable. Consumption has fallen sharply due to economic slowdown.