Butter Breaking Below € 5000,- ?!

After a few quiet days, the butter market broke loose again. Producers seem to have finally absorbed what Anuga already made clear — the market is falling, and financing stock in a declining environment isn’t a strategy, it’s denial. Our father would have said, “better late than never,” but this time, it really is late. Selling into Q4, with demand close to zero, triggered what we all knew was coming — another bearish leg down. Buyers now claim sub-€5000 level purchases directly from factories all across Europe, and trades via us are being executed just above that psychological line — a line that no longer offers much resistance. The next question is simple: where is the next floor?

A Market That Forgot to Breathe

Today, we’ll focus solely on butter. Powders and cheese offer little new to say. One producer told us yesterday: “You can say it — you told us so.” Fair enough. But even we didn’t have sub-€5000 printed for 2025. The move from the lowest stocks in twenty years to what could soon be the highest is remarkable, if it weren’t so damaging. The EU dairy market is breaking on every imaginable level. Some call it a perfect storm. It feels more like a perfect hurricane.

Milk Flood

Never in our trading experience have we seen milk intake rise this fast. Across the EU, volumes are up +3%, +4%, even +7% in milk solids — and that’s supposed to be the low point of the season. The weather is near-perfect, feed is cheap, and milk prices remain artificially high. Looking ahead six months, there’s no reason to expect relief. Co-ops are only trimming milk prices by a few cents per liter, and politics seems determined to keep milk too expensive for too long.

Global Flood, No Floor

It’s not just Europe. The U.S. is pushing out record milk volumes with higher fat content, and no sign of slowing — some even joke milk has become a byproduct of beef. CME butter prices keep falling, NFDM included. The EU is pumping, the U.S. is pumping, and New Zealand — even if slightly less dramatic — continues to increase YoY. More milk, more product, more exports. The world market is getting flooded, and there’s no clear drain.

Broken Demand

For the first time since we started trading, internal EU demand is truly cracking. Retail chains are fighting inflation, and consumers are refusing to play along. Sales data from Germany and France show more than -5% consumption for cheese and butter YoY since July. Partners selling into retail confirm that August and September continued the same way. Lower newly contracted retail prices might soften the fall and some expect promotions in retail might increase demand a bit, but what hasn’t been eaten in the past months won’t be eaten twice next month. Repackers are delaying, traders are full, and the pipeline is slipping.

Imports Rising, Competitiveness Falling

We’ve never seen such import pressure — butter and cheese volumes into the EU are at record highs. Ongoing trade talks with the U.S. could add even more volume next year, especially as U.S. prices continue to fall. And the strong euro only sharpens the pain — Europe is fighting the world market on multiple fronts and losing ground on all of them.

The Pain We All Knew Was Coming

So here we are. Surging production, record imports, collapsing retail sales, slower exports, and no visible floor in butter, AMF, or cheese. Many producers believed the bearish data was already priced in. It wasn’t. The one thing being overlooked is absorption capacity — the market’s ability to digest what’s coming, physically, financially and psychologically. And right now, it can’t.

The reality? The volumes coming over the next six months don’t fit this market. The market doesn’t need them and on the export market we are competing against much lower prices still. And yet, these extra volumes are coming. Our advise to the producer we spoke to remains the same. Better to take the pain today — before it forces itself upon you tomorrow.

Butter market: Market Support Evaporates

Where in recent days demand still offered some comfort, that support collapsed entirely today. By late afternoon, buyers were gone — not waiting, not hesitating, just gone. We still believe Q2–Q4 demand exists, but with heavy pressure now hitting the Q4 market, the whole curve feels burdened. Buyers sense it too. The lowest trades of the day set the tone, see below — and across all periods and products, we can now offer more volume at the same price.

Lowest Traded Levels

Period	Origin	Price
October	NL / DE / BE	€ 5,100
November	Arla DK / SE	€ 5,000
December	Irish	€ 5,050 FCA NL
Q1	NL / DE / BE	€ 5,225
Q2	NL / DE / BE	€ 5,400

Q4 Demand: Nowhere to Be Found

The biggest issue remains Q4 — there is simply no demand left. Traders are full, in some cases overbooked, struggling to move old stock while fresh product keeps arriving. End users face delays downstream, forcing them either to hold inventory or postpone deliveries — neither is bullish.

Producers came back from Anuga with the same challenge: too much butter, too few buyers. The situation is spreading — Q2/Q3 production butter is now being offered from Portugal, Spain, Italy, Germany, the Netherlands, France, and Ireland all around € 5100-€5200 levels from the producers' side. Only Poland seems to have its stocks somewhat under control. And producers also prefer to sell their frozen stock first, while some also still have to make a plan for what to do with the fresh product they will produce over the next 6 months.

Finding bids above € 5,000 for this year has become impossible. Finding sellers willing to step below that level seems only a matter of time. Last Friday, Q1 traded at € 5,400. Today, the best bid is € 5,150.

Expected Market Open

Period	Origin	Bid	Offer
December	NL / DE / BE	€ 5,000	€ 5,100
November	Irish lactic	€ 4,850	€ 5,100
Oct/Nov	French butter	—	€ 5,100
Q1	NL / DE / BE	€ 5,150	€ 5,200
Q2	NL / DE / BE	€ 5,300	€ 5,400
H1	Polish SC	€ 5,100	€ 5,350

The Weight of the Curve

The market feels heavy. Not broken — but burdened by its own weight.
There’s too much butter, too little movement, and too many holding on to hope that the pain will fade on its own. It won’t.