Get the latest insights on price movement and trend analysis of Butter in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).
For the Second Quarter of 2022
Recently, a forward trend in butter prices has been seen in the Asian market. Originally butter was associated with western cuisine; however, it is being promoted aggressively by Fonterra Co-operative Group in the Asian market. The butter processing plants are expanding to keep up with the increasing demands, keeping butter prices steady.
Due to the declining milk consumption amidst the already constrained milk supply, the commodity’s prices are falling in the European market. Currently, the price for German, Dutch and Irish butter averages 7000 USD/MT for this quarter. The reason behind this falling demand is the recent weather issues like heat waves across the EU hampering butter production.
The high feed costs due to the ongoing Russia-Ukraine confrontation and the new sustainability-related measures have offset the domestic demand for the commodity. The EU is importing from the United States to meet its requirement, thereby affecting the already tight supplies of the US and driving the prices of the global market further.
Amidst the rising inflation and constant supply disruptions in the dairy and allied sectors, the commodity’s price in the USA reached a multi-year high in June 2022. The US dairy farmers and butter processors are struggling to maintain a stable supply due to the high feed cost, raw materials, and labor shortage. Hence, due to subdued production and tight inventories, the prices averaged a whopping 6008 USD/MT for the April-June quarter.
US butter has a better competitive advantage in the global market and often influences its price trends worldwide. The US exported more butter than any other butter-producing nation, which strained the already constricted domestic supply, toppling the US butter ledger.
Owing to the higher butter prices, domestic consumers are switching to readily available substitutes like margarine and vegetable oils as inflation has already muted their spending power. As a result, there is high speculation that a downward trend will be seen in the prices of the commodity for the upcoming quarter 3.
For the First Quarter of 2022
Free-on-board (FOB) butter prices in the European Union increased by EUR 300/MT in the three weeks to January 19th, reaching EUR 5,927/MT. However, butter futures prices are in backwardation (lower than spot prices), indicating that those markets anticipate a minor price correction. Butter prices are expected to remain stable over the next six months.
This high butter price has not been seen since 2018, when premium prices encouraged milk processors to increase butter output, putting downward pressure on prices and resulting in significant drops in butter prices in 2019. However, now, farm expenses are skyrocketing, squeezing farmers' margins, and labour is scarce.
After reaching multi-year highs in January 2022, US butter prices remained firm in Q1 2022. The average price of US butter in the January-March '22 quarter increased by 79 percent quarter on quarter, owing to lower butter production and tight inventories, as well as increased demand from the foodservice sector. Because cheese production capacity is increasing, milk processors are channelling more milk to cheese vats at the expense of butter production.
Rising vegetable fat prices also discourage product substitution while increasing butter demand. Butter inventories in the United States increased by 20% month on month in February '22, to 263 million pounds, but were 26% lower year on year. Inventory levels, according to market participants, are comfortable but not excessive. Some plant managers are working to increase butter inventories if labour shortages and tight cream supplies do not occur, while others believe current butter inventories are adequate.
For the Fourth Quarter of 2021
In the fourth quarter of 2021, the average European butter price increased by 28%. A large portion of this increase occurred between October and November, when prices increased by 10.7 percent and 10.7 percent, respectively, while prices increased marginally by 1.8 percent in December compared to the previous month.
This means that buyers planned to buy ahead of the holiday season due to a decrease in butter output and uncertainty about butter inventories. Furthermore, butter demand remained stable, according to market participants, who reported that butter sales fared well against the Omicron COVID-19 variant. Thus, butter sales in the foodservice sector increased in December compared to the same period the previous year, offsetting a year-on-year decline in retail sales.
Butter prices in the United States remained stable in October. The October average price fell by 0.5 percent month on month to USD 3,886/MT. Overall, US butter prices have increased by 5.2 percent since last August due to a combination of lower butter supplies and higher domestic and international demand.
Procurement Resource provides latest prices of Butter. Each price database is tied to a user-friendly graphing tool dating back to 2014, which provides a range of functionalities: configuration of price series over user defined time period; comparison of product movements across countries; customisation of price currencies and unit; extraction of price data as excel files to be used offline.
Butter is a well-known dairy product that is made from the fat and protein components of milk or cream. It appears as a semi-solid emulsion at room temperature, comprised of almost 80% butterfat. It is utilised as a spread (at room temperature) and can also be used as a condiment in melted form. It is utilised as an ingredient in areas like baking, sauce making, pan frying, and other cooking procedures.
|Industrial Uses||Baking, Spread, Sauces, Condiment, Cooking|
|Supplier Database||Fonterra Co-operative Group, Arla Foods Amba, Lactalis Group, Unilever PLC, Kerrygold USA|
|Region/Countries Covered||Asia Pacific: China, India, Indonesia, Pakistan, Bangladesh, Japan, Philippines, Vietnam, Iran, Thailand, South Korea, Iraq, Saudi Arabia, Malaysia, Nepal, Taiwan, Sri Lanka, UAE, Israel, Hongkong, Singapore, Oman, Kuwait, Qatar, Australia, and New Zealand
Europe: Germany, France, United Kingdom, Italy, Spain, Russia, Turkey, Netherlands, Poland, Sweden, Belgium, Austria, Ireland Switzerland, Norway, Denmark, Romania, Finland, Czech Republic, Portugal and Greece
North America: United States and Canada
Latin America: Brazil, Mexico, Argentina, Columbia, Chile, Ecuador, and Peru
Africa: South Africa, Nigeria, Egypt, Algeria, Morocco
|Currency||US$ (Data can also be provided in local currency)|
|Supplier Database Availability||Yes|
|Customization Scope||The report can be customized as per the requirements of the customer|
|Post-Sale Analyst Support||360-degree analyst support after report delivery|
Note: Our supplier search experts can assist your procurement teams in compiling and validating a list of suppliers indicating they have products, services, and capabilities that meet your company's needs.
Butter is generally derived by churning milk or cream to separate fats from the liquid (buttermilk), which finally produces Butter in a semi-solid state. Commercially, buttermaking involves steps like bacterial acidifying and heat treatment, and the use of advanced machinery like mechanical churn.
The displayed pricing data is derived through weighted average purchase price, including contract and spot transactions at the specified locations unless otherwise stated. The information provided comes from the compilation and processing of commercial data officially reported for each nation (i.e. government agencies, external trade bodies, and industry publications).
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