EU and UK butter prices converge

Tuesday, 19 November 2019

By Kat Jack

UK wholesale butter prices have been at a discount to EU prices since February 2019, when compared in sterling terms. This discount had been in the range of £100-£300/tonne. However, these two prices converged in September and have remained close; the October UK price was only £34/tonne below the EU price.

Butter prices have generally been trending downwards since the middle of 2018. For most of that time, the UK price declined at a faster pace than the EU, creating a divergence in the prices. In September, UK butter prices lifted, driven by a peak in cream demand, bringing them back in line with EU prices.

Currency will have played a part, as the pound strengthened in September and October, reducing the value of euro prices once converted. The EU wholesale butter price increased by 1% in euro terms between August and October, but in sterling terms the price fell 3%. This helped bring the EU butter price closer in line to the UK price when measured in sterling terms.

Good product availability in the UK may also have contributed to the price differential. UK milk production was strong through winter 2018 and most of 2019, growing ahead of most EU countries. With this, butter production increased; for the 12 months Sep18-Aug19, UK butter production was up 20% on the previous 12 months, while overall EU production was only up 3%. Additionally, Brexit uncertainty may have played a part, requiring price discounts from UK manufacturers to persuade nervous buyers on the continent.

Image of staff member Katherine Jack

Katherine Jack

Senior Analyst - Dairy

See full bio

Sign up for regular updates

You can subscribe to receive Dairy market news straight to your inbox. Simply fill in your contact details on our online form and select the information you wish to receive.

Visit the Keep in touch page

While AHDB seeks to ensure that the information contained on this webpage is accurate at the time of publication, no warranty is given in respect of the information and data provided. You are responsible for how you use the information. To the maximum extent permitted by law, AHDB accepts no liability for loss, damage or injury howsoever caused or suffered (including that caused by negligence) directly or indirectly in relation to the information or data provided in this publication.

All intellectual property rights in the information and data on this webpage belong to or are licensed by AHDB. You are authorised to use such information for your internal business purposes only and you must not provide this information to any other third parties, including further publication of the information, or for commercial gain in any way whatsoever without the prior written permission of AHDB for each third party disclosure, publication or commercial arrangement. For more information, please see our Terms of Use and Privacy Notice or contact the Director of Corporate Affairs at  © Agriculture and Horticulture Development Board. All rights reserved.