Inside: Dairy Market
Butter prices are heading for a new record
Slowly but surely, butter is becoming scarcer on the world market. As a result, prices are heading for a new record. In New Zealand, where winter is approaching, they are the first to notice.
Read this article?
Become a subscriber and get instant access
Choose the subscription that suits you
Broadly speaking, the butter prices in New Zealand and the European Union (EU) definitely the same trend. When the butter price in the Netherlands is compared with that of New Zealand, only the extreme outliers appear to be larger. This means that record prices may again be achieved for the Dutch butter price in the coming months.
Shortage of butter
In New Zealand they are starting to notice more and more that there is a worldwide shortage of butter, something that is in 2017 caused a lot of fuss. The Kiwis therefore take into account that the price will reach a new record in the coming months. It is winter in New Zealand and the milk supply is at its lowest point.
Up to and including the Global Dairy Trade (GDT) of May 15, butter has shown an increase of at least 30%. Which means that there is only a 4% gap between the price record and the current quotation. Here too, the interaction between the EU and New Zealand becomes clear. Without it delayed spring and a lower supply of fat would not have allowed the GDT to move up.
Expectations are rosy
In an interview with Rural Life, Rabobank indicates that it is not yet certain about Fonterra's forecast milk price. That will come in the fourth week of May. In any case, expectations are rosy. There is also more confidence in the butter price, which has the potential to rise further. There is even a chance that butter will beat what has until now been the most important dairy product for the milk price, whole milk powder.
The butter price in New Zealand lacks extreme outliers.