Global Butter Supplies Will Be Short in 2018
Butter stocks have been tighter in 2017 due to a combination of reduced production levels and increased consumer demand. Based on a report from agrimoney.com, it looks like butter supply will continue to get squeezed well into 2018.
The report states that shipments from the two top butter exporters, the EU and New Zealand, will be unchanged next year due to stagnant production.
Combined exports of butter and anhydrous milk fat are projected to rise only 2,000 tons in 2018. Butter exports are not expected to rise at all from the EU.
"With the EU and New Zealand between them responsible for more than 80% of world butter exports, the forecasts hint at a continuation of the market conditions which have sent prices to record highs and boosted values of dairy other dairy fats," the report states.
Limited increases in milk output in both regions are to blame for stagnant exports. Milk output in New Zealand is expected to rise 0.5% due to slight growth in the dairy herd. This is still some 270,000 tons below the 2014 high.
In the EU, production is only expected to grow by 0.1% due to a shrinkage in the dairy herd but higher production per cow.