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Butter Decline Accelerates

2 min read
  • Butter

Although a morning note was not originally planned, the pace of decline in the butter market warrants an update. With more than 1,800 MT of butter brokered, yesterday marked one of the most active trading sessions since the start of our brokerage business. Activity was broad-based, involving eight different sellers and seven buyers. At the same time, we note a considerable number of market participants remaining on the sidelines, debating whether the market is preparing for a bounce or facing a deeper correction.

September Trades

Butter for September delivery initially traded at €6,500/MT for fresh Solarec. As the day progressed, offers for NL/DE/BE origin eased to €6,400, while Irish offers slipped further to €6,350 DAP NL, unsettling buyers. We are aware of concluded trades at €6,200 FCA, with additional offers continuing to emerge at this level.

Q4 Outlook

The Q4 curve followed a similar trajectory. At its high, fresh butter from specific factories traded at €6,400, while offers for NL/DE/BE dipped to €6,300. Additional Irish and Swedish offers entered the market, though bids at these levels became increasingly scarce. We expect some buyer support to emerge around €6,150 FCA NL, though sellers may find it difficult to accept this step down.

Strip and Forward Periods

The December–February strip opened trading at €6,275 (NL/DE/BE) but closed the day at €6,150. Likewise, Q1 2026 values declined from €6,250 in the morning to €6,100 by close.

Producers Accepting Reality

We observe that producers are adjusting their offer levels more frequently, reflecting both nervousness and attempts to capture liquidity in a fast-moving market. Some partners on the sales side appear to be trying to “front-run” the decline by offering volumes at more aggressive levels, aiming to stimulate demand before further downward corrections occur.

Irish producers in particular have taken the lead in this strategy, placing forward offers ahead of the curve. From conversations with our partners, it is evident that German, Danish, and Belgian producers are also weighing similar approaches, considering whether a “flee forward” tactic might be preferable to holding back in a falling market. This dynamic suggests that the competitive push among sellers could accelerate price discovery in the coming days.

Market Perspective

The market appears poised to test the €6,000 level in the near term. For now, it is difficult to identify factors capable of halting the decline. Export demand is unlikely to accelerate meaningfully unless values move well below €6,000—and even then, questions remain as to whether EU product can find competitive outlets to ease domestic pressure.

The strength of the €6,000 level, whether as a floor or a temporary springboard, will depend heavily on milk production trends. With German, French, Irish, and Polish milk flows under close scrutiny, sustained growth in output from these key producers could turn the perceived “floor” into a “trapdoor.”

Opening Bids

We expect to open the market with the following bid indications:

  • October/November: Irish lactic butter at €6,100 FCA Ireland (6 trucks)
  • Q4: NL/DE/BE fresh/frozen at €6,200 (6 trucks)
  • Q1: NL/DE/BE fresh/frozen at €6,050 (6 trucks)
  • Q2: NL/DE/BE fresh/frozen at €6,075 (6 trucks)
  • H1: NL/DE/BE fresh/frozen at €6,075 (6 trucks)

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