Price gap between butter and cream is closing

Parties in the market confirm that the price for butter has increased, but that the number of actual transactions has been very limited in recent months and that the real demand is still difficult to estimate.

There is therefore a significant difference between the cream and butter markets. Cream is in high demand and is in great demand. The high demand market and high prices made it unattractive for dairy companies to make butter. Butter was undervalued from a price point of view and the market was also not asking for more butter. What had to be delivered was often supplied from existing stocks or on the basis of long-term contracts.

In recent weeks there has been increasing uncertainty on the butter market. At first glance, the European quotations appear to be reasonably in line, albeit with the usual mutual differences (see below).

However, concerns have arisen following the French listing. There appears to be little going on in the EU overviews, but France's own listing shows a very different development. No weekly quotation here that starts with a 5, but a lot less. While normally the French quotation is always high. Often too high, many traders grumble. 

Non-sales related trade
It could indicate that the butter quotation we see now does not reflect the actual market, but is the result of non-sales-related market activity, several parties wonder. Be that as it may, it indicates that there is still a lot of uncertainty in the butter market and how it will develop in the coming months.

A small reassurance may be that the German butter price for products in small packages is reasonably high. Prices are reported from €6.100 to €6.200 per 1.000 kilos.