That is according to multi-national financial services firm, StoneX, in its most recent EU dairy analysis.

Consecutive weeks of gains for the European butter index saw it move up 4.3% since the start of December while SMP recorded its twentieth increase in a row last week (week commencing December 13), up a further 1.3% over the previous fortnight leaving it 50% above where it was at the same time last year.

The strength in commodity prices wasn’t limited to just butter and SMP, however, spot cheese, whole milk powder (WMP) and whey powder have also seen big gains in recent months, said Dr. Peter Meehan, senior EU dairy analyst at StoneX.

He continued:

“The rally in dairy commodity prices was kicked off by very strong global demand for commodities, particularly from China.

“Chinese demand has plateaued or even showed signs of easing a little in recent months; however, demand from many of the other main global dairy importers has stepped up, keeping a floor under global demand.

“Added to this, we’ve also seen global milk supplies come under pressure over the last few months, which has added further support to dairy commodity markets.

“Data released has shown milk production from Germany and France – Europe’s two biggest milk producers, who combined, accounted for 36% of European of milk production last year – remained under pressure in October.

“German supplies were down 2.3% on last year leaving year-to-date collections down 1.7% on 2020 levels.

“Meanwhile, French production was down 1.9% in October and cumulative French collections sit 1.3% behind last year.”