As expected, butter prices are continuing to rise and the European price is now at the highest ever, even surpassing the 2022 peak, which many thought would never be seen again.

It’s another indication of the volatility in the market over the last two years.

Butter prices are now at €7,645/t, an increase of €290/t on last weeks’ price. Rather than slowing down, the rate of increase is speeding up and the futures market has butter greater than €8,000/t for October.

We are now seeing steady gains for most other key commodities, with cheddar gaining €145/t to reach €4,615/t and whole milk powder (WMP) gaining €155/t to hit €4,145/t.

These are substantial gains in the space of a week and it shows the fear among buyers about tight supply.

This, in turn, is fuelled by low stocks, particularly of butter, but also the threat of future supply, as bluetongue virus affects milk supply on the continent.

Skim milk powder (SMP) is also making gains, but at a lower rate, as it increased by €50/t to €2,440/t this week.

However, the futures market for SMP is much more positive, putting it over €2,600/t for winter.

At the Global Dairy Trade (GDT) pulse auction, SMP increased this week by €108/t to reach €2,392, which is similar to the European price.

WMP increased by a whopping €248/t to reach €3,197/t, which is the highest price recorded at the pulse auction since September 2022. All eyes will now be on what happens at the next GDT auction.