Butter markets continue to shine, with EU markets returning 5% to 6% more than US markets. However, the shine is taken off butter markets with the slump in skim milk powder (SMP) prices.

SMP is trading at or near intervention prices and as the Republic produces more milk over the coming months, Irish processors will be forced into producing more SMP and this will not help Irish prices.

EU milk supplies are back and forecasts suggest they will fall further if the Dutch continue to reduce cow numbers and strong beef prices mean more milking cows are culled.

Looking to the EU, butter prices are still winning, with German butter up €50 last week to €4,275, Dutch up €60 to €4,310 and French up €100 to €4,250. In contrast, powders are going in the other direction, with German whole milk powder (WMP) now at €2,800, down €155/t. Dutch WMP is down €80 to €2,670 and French is down €50 to €2,800/t.

SMP is effectively at intervention level prices, with German and French prices at €1,740 and €1,730 respectively and Dutch at €1,700/t. Feed grade SMP is at €1,640/t, close to where they were last year.

US block butter is up again to €4,486/t, so it means the EU has a 6% advantage on price compared with the US prices and 5% over Southern Hemisphere prices.

In terms of prices, Arla in the UK cut its base price by 0.42p/litre for April – the first cut since July 2016, bringing the price to 27p/litre.

New Zealand confirmed a price of $6/kg MS.