Europe’s butter market continues to heat up, as rising demand is met with very tight supplies.

With Europe now past peak milk production and some 42,000t of butter still in private storage, supplies of bulk butter are reported to be extremely tight.

This week, spot prices for European butter as reported to the Dutch dairy board jumped another €150/t to hit €3,300/t, which is the strongest price level for butter since late March. However, industry sources say butter is fetching as much as €3,500/t for readily available product, which is where prices were prior to COVID-19.

As one of the premier butter exporters in Europe, this places Ireland’s dairy industry on a strong footing for the summer months.

At the same time, cheese markets are also on the up. Mozzarella prices increased to highs of €2,850/t in the past week, while gouda prices also improved to €2,800/t. Cheddar prices held steady this week at €3,100/t, which is a very healthy price level.

There can be no doubt the reopening of restaurants, hotels, cafés and the wider food service market is boosting demand for dairy fats such as butter and cheese.

On the powder side, the recent recovery in the price of skimmed milk powder (SMP) appears to have come to a halt, despite some traders saying there is a shortage of product. SMP prices dropped back slightly this week to €2,160/t, which is still a long way off the €2,600/t level where prices were before COVID-19.