The last week has been one of the best weeks in months in the European dairy market, with butter prices soaring ahead by €475/t – an €850/t increase on where they were just four weeks ago.

All other dairy commodity prices have increased also, but not by as much as butter has increased by.

Whole milk powder (WMP) has increased by €150/t on the European spot market, while skim milk powder (SMP) increased by €125/t to reach €2,600/t.

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Skim is now up over €250/t compared to where it was a few weeks ago. Both the increased price of skim and the increased price of butter is a real shot in the arm for big butter producers, which is a big staple among many Irish processors.

SMP prices at the Global Dairy Trade (GDT) pulse auction this week went up by €200/t and is now breaking the €2,800/t mark, which is €200/t ahead of the European price. There were more marginal gains for WMP at the GDT pulse sale.

At €3,300/t for WMP at the main GDT auction last week, the price of WMP is back to where it was before the downturn in prices last autumn. European prices are still trading 25% lower, or about €1,000/t lower than their 2025 peak price.

It is likely that the conflict in Iran has caused the spark in the dairy markets, with fears among buyers over availability and price if the conflict escalates.

Milk supplies across Europe continues to be strong, with French deliveries in January up over 6% compared to January 2025.

While high, the rate of increase has slowed, as it was over 8% higher than the year prior in December.