Prices drop as butter and cheese supply increases

The record butter prices of 2017 have started to reverse following an increase in milk fat supplies. Prices are also down as UK buyers are holding off from locking into 2018 contracts over expectations decreasing prices may fall even further.

High cheesemaking profitability has increased EU supply. This has weighed down on prices, as stocks currently outweigh consumer demand.

European milk powder prices have fallen, with SMP reaching its lowest level in two years. In October, EU SMP production rose 15% year on year due to high butter processing profitability - increasing SMP as a byproduct.

Egg yolk powders have been the most affected by August’s fipronil scandal with supplies tightening across the EU. However, prices are now easing as processing slowed.

Prices for processing shell eggs in the EU remain at record levels, following the fipronil outbreak in August 2017.