Butter shortages send prices to unprecedented levels
EU butter production has fallen 5.3 % for the first four months of 2017, and by 3.3% for the 12 month period to April 2017, creating a situation of shortages which is leading to huge price increases, with spot prices this week exceeding €6,000/t (see further in blog).
SMP production, meanwhile, has actually fallen back even more (-9.7% for the first 4 months of this year, and -6.4% for the 12 months to the end of April), but the price impact has been far more modest, largely due to the overhanging 350,000t of SMP in intervention.
Milk deliveries in the EU have been a mixed picture, with Ireland, Poland and more recently the UK continuing on the expansionary trend, while larger countries like Germany and France producing considerably less than in the same period last year. The upshot is a 1.5% fall in EU milk collections for the first four months of the year, and a 1.9% fall for the 12 months to April 2017.