Butter, whole milk powder and skim milk powder prices strengthen amid drought-related supply pressures
Europe: European dairy commodity prices continued to strengthen at the latest Dutch Dairy Board auction, with butter, whole milk powder and skim milk powder all recording gains as tighter milk supplies put upward pressure on the market.
Butter prices increased by €50 per tonne, reaching €4,000/t at Wednesday’s auction. This represents the highest price recorded since April 2026, although the current level remains significantly below the €6,820/t recorded during the same period last year.
Milk powder prices also strengthen
Whole milk powder recorded a stronger increase, rising €90/t to €3,610/t. The latest price is the highest level recorded for the commodity since October 2025, indicating a gradual recovery in the European milk powder market.
Skim milk powder also posted a significant gain, increasing €70/t to €3,030/t. The latest price represents a four-year high, reflecting strengthening market conditions for the product.
| Dairy commodity | Latest price | Weekly change | Market milestone |
|---|---|---|---|
| Butter | €4,000/t | +€50/t | Highest since April 2026 |
| Whole milk powder | €3,610/t | +€90/t | Highest since October 2025 |
| Skim milk powder | €3,030/t | +€70/t | Four-year high |
Summer drought puts pressure on milk supplies
The recent increases are being attributed primarily to tighter dairy supplies following summer drought conditions. Reduced availability of milk is putting pressure on processors and supporting commodity prices across key dairy products.
However, market sources reportedly believe that further reductions in dairy production may be required before the market experiences a stronger and more sustained recovery.
The supply situation will therefore remain an important factor for European dairy commodity markets in the coming months. Weather conditions, milk production levels and farmer responses to input costs are likely to influence the availability of dairy commodities.
Dairy carbon network focuses on farm efficiency
Meanwhile, sustainability and farm efficiency remain key areas of focus for dairy farmers in Northern Ireland.
A dairy farm operated by Caryn Webster at Islandmagee is scheduled to host a UK Dairy Carbon Network event on 3 September, focusing on how breeding decisions can improve genetic gain, herd longevity and overall farm efficiency.
Webster milks 60 Holstein cows across 116 acres under an autumn-calving system. The herd produces approximately 7,500 litres per cow, with around 2 tonnes of concentrate used per cow. Cows typically graze from March through October.
The farm walk will provide an opportunity for dairy farmers to examine how breeding strategies can contribute to improved herd performance while supporting environmental objectives.
Sustainability becomes increasingly important
The UK Dairy Carbon Network is working with more than 50 dairy farms across the UK to put practical measures for reducing greenhouse gas emissions into practice.
The initiative reflects the growing focus on combining productivity with environmental performance. Breeding for improved longevity, efficiency and productive performance can potentially help farms produce milk more efficiently while reducing the environmental impact associated with maintaining less productive animals.
The combination of stronger dairy commodity prices and continued sustainability efforts highlights the two major priorities facing European dairy farmers: responding to changing market conditions while improving long-term farm efficiency.
With commodity supplies remaining tight and environmental pressures increasing, production decisions, herd management and farm-level efficiency are expected to remain central to the European dairy sector.
