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Butter: crazy market situation in the EU

April 13, 2020 8:00 AM, Der AUDITOR
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FRANKFURT/BRUSSELS. The Covid-19 pandemic has prompted a drastic shift in demand within the EU. Farmers associations in Germany and in Ireland report dual dynamics in the dairy market. Although panic buying has eased somewhat, the market situation is difficult to adjust to.

Farmers urged to cut milk production

While some dairies are lucky enough to be selling products to the retail markets, where consumer demand has surged, others are having difficulty in compensating for the closure of hotels and the catering business. In Italy, some dairies had to close as too many employees were off sick. The demand for milk is so low in Germany that the Deutsche Raiffeisenverband, the leading agriculture and food cooperative, has called on farmers and on dairies to cut milk production.

Drastic slump in prices

Traders in Europe and in the US report that the dairy market is under pressure as the dairies are busy processing excess milk supplies into butter, cheese and cream and into dry milk products, which are being sold in the global market. In Germany, the situation in the butter market differs greatly depending on region. While some end consumers still buy at their local bakeries, others exclusively shop in discounters. Germany’s baking industry is confronted with enormous problems as consumer demand has stalled in many areas.

The Bäko, Germany’s leading bakery cooperative, has reduced working hours. In addition, the shortage of hygiene wear has an impact on processing, as there are, for instance, supply squeezes for gloves and face masks. Although panic buying has subsided nominally in the supermarkets, the order volume is still up for deliveries after Easter. The prices for bulk butter have declined sharply in Poland and in Germany with the Butter and Cheese Exchange in Kempten quoting a price level of EUR 2.70-3.00 per kg EXW.




EXW Poland

EUR 2,800/mt

EXW Germany

EUR 2,850/mt


EUR 2,813/mt


USD 4,263/mt

Trade sources

Saudi Arabia simply loves EU butter

The EU average butter price has also slumped by 5.4% in four weeks and was quoted at EUR 3.29 per kg last week. EU butter exports surged by 66% to 17,739 tonnes in January. Although the US remains the main export destination, exports are only 8% up. Shipments to Saudi Arabia have more than quadrupled and a drastic upsurge has also been witnessed for Morocco. As CLAL suggests butter shipments to China have declined and will continue to do so.

EU butter exports, in tonnes, January 2020









Saudi Arabia












Extra-EU total






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