Inside Milk
European butter stock nil, what is perspective?
As a result, butter stocks in Europe have rapidly declined again. Much more butter was also sold in supermarkets. What will the market do?
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Since the start of the corona crisis, there has been a lot of enthusiasm for putting away butter in the European Commission's private storage scheme. This was intended to support the dairy market. This started a butter stock that peaked in July of 65.656 tons in Europe. The table below shows the butter stock for the past 4 years. It is the first time since 2017 that Europe has a butter stock again.
Due to the corona crisis, there has been a shift in the demand for butter. Due to the disappearance of consumption in the catering sector, the demand from the retail (supermarkets) has increased considerably. As a result, the warehouses were quickly empty again.
Dutch butter production in September 2020 was at a level of 9.500 tons. This has since risen further to 13.200 tons in January 2021. Across the EU, butter production has actually decreased. In January 2021, 188.000 tons were produced, while this was a lot higher in 2019 and 2020.
Changing Outlook
In the past few weeks before Easter, there was a strong demand for butter. As a result, prices have risen rapidly to a peak of €4.220 per tonne in the DCA quotation. Now that this period is over, it looks like there will be more supply in the months of April and May. This will allow the supply and demand of butter to stabilize again.
As soon as the hospitality sector reopens this summer, consumption from retail is expected to shift back to the hospitality industry. Looking at the situation before corona, this means a lower demand for butter. This is difficult to predict, however, because it is unknown whether consumers will revert to the same consumption pattern.