Butter market overview 2026 [Global Report]

The global butter market has changed direction several times over the past dozen or so months. The declines that began in 2025 continued into the first half of 2026. High milk availability, relatively cheap cream, and rising inventories put pressure on prices for an extended period.

In the summer, however, the situation in Europe began to change. After reaching their lowest levels in June and early July, prices gradually rose, particularly in Eastern Europe. At the same time, other major markets are developing differently: the United States remains very price-competitive, while New Zealand is entering a period of seasonal production growth.

As a result, the European market is stronger today than it was at the beginning of the summer, but we are not yet seeing a similar price increase in all major regions.

Market Dynamics

European butter started 2026 at around 4,000 EUR/MT. In February, prices began to rise, and by early March they approached 5,000 EUR/MT. However, this increase occurred amid continued high milk availability, relatively cheap cream, and rising inventories, so it did not last long.

Toward the end of March, prices began to fall again, and by mid-June, one of the European butter market indices stood at around 3,640 EUR/MT. High availability of raw materials allowed production to continue, while many buyers had already secured supplies for the coming months and limited their purchases on the spot market.

The situation began to change at the start of the third quarter. After hitting summer lows, European prices gradually rose, and by the end of August, the EU average stood at around 4,160 EUR/MT.

However, this change is not equally evident worldwide. Europe is strengthening, while the U.S. continues to offer butter at significantly lower prices, and Oceania remains well-supplied.

This is confirmed by Global Dairy Trade results. During the September 1 auction, the overall GDT index rose by 0.9%, but the price of butter fell by 0.8% to 5,028 USD/MT, and AMF declined by 1.3%.

Regional Analysis of the Butter Market

Europe

Europe was one of the regions where high production had the strongest impact on the market in the first half of the year. From January through June, milk deliveries in the EU were 3.4% higher than a year earlier, and butter production rose by about 7.5%.

Part of the additional supply was directed toward exports. From January through April, exports of butter and other milk fats rose by 33.3% year-over-year. This helped reduce the amount of product remaining on the European market, but it was not enough to fully offset the increase in production.

In the summer, seasonal milk availability began to decline, and some buyers returned to the market. As a result, prices moved away from the levels observed in June and July.

This shift is particularly evident in Eastern Europe, where prices rose faster than in the broader European market. This indicates that the supply situation is not uniform across the entire region.

The outlook for Europe is better today than it was in the middle of the year, but high production in the first half of the year and accumulated inventories continue to limit the potential for rapid price increases. Competition from significantly cheaper products from the U.S. remains an additional factor.

North America

The United States remains one of the most important competitors for suppliers from Europe and New Zealand. High milk production and growing processing capacity are increasing product availability, and prices remain significantly lower than in other major regions.

In July, U.S. butter production totaled 189.2 million pounds, up 5.5% from a year earlier. In the first seven months of the year, production rose by approximately 5.9%.

Ample product availability allowed U.S. suppliers to increase foreign sales, though the first signs of a slowdown emerged during the summer. In July, butter exports alone fell by 8% year-over-year.

Despite this, the U.S. continues to play a very important role in the market. As long as U.S. butter remains significantly cheaper than European butter, importers have the option of shifting part of their purchases to the United States, which limits the scope for further price increases in Europe.

Oceania

Oceania is currently in a different phase of the season than Europe. New Zealand is entering a period of seasonal growth in milk production, which may increase the availability of products intended for export.
The country remains one of the world’s leading exporters of milk fats. Forecasts for 2026 project butter and AMF exports at approximately 515,000 metric tons, with China remaining the primary destination.

However, prices there are not rising as much as in Europe. In early September, the GDT recorded another slight decline in butter prices. Growing supply in New Zealand may therefore limit the potential for stronger growth in global prices toward the end of the year.

Asia

Asia continues to play an important role on the demand side, with China being the most significant market. In the first half of 2026, China’s imports of butter and other milk fats totaled approximately 91,900 metric tons, up 14.9% from a year earlier.

The increase in purchases helps absorb part of the additional supply from major exporting regions. At the same time, the average import price was lower than a year earlier, indicating that the rise in demand occurred amid more favorable pricing conditions for buyers.

China remains a key market for New Zealand, but domestic production of dairy fats is also growing there. This means that further growth in imports will depend on both consumption and the competitiveness of local production.

Middle East and North Africa

The Middle East and North Africa remain important destinations for global trade in milk fats, but demand conditions vary from country to country.
Price differences among suppliers are particularly significant in the region. Importers can choose between European, New Zealand, and U.S. products, so low prices in the U.S. increase competition with Europe.

For exporters, this means that purchasing decisions are increasingly determined not only by product availability but also by its price relative to other sources of supply.

Trends and Forecasts

The second half of 2026 looks different from the first. The steepest decline in the European market has likely already passed. After hitting their lowest levels in June and early July, prices rose, and the increase was even more pronounced in Eastern Europe.

However, this does not mean a return to the situation seen in 2025. Global milk supply remains high. Europe increased production in the first half of the year, the United States continues to produce more butter, and New Zealand is entering a season of higher supply.

Therefore, the rise in European prices is occurring against a backdrop of continued high global milk supply.

Current forecasts point to a more stable European market in the final months of 2026 rather than a rapid rise in prices. Seasonally lower milk supply may support the EU market, but earlier high production and inventories will continue to influence the situation.

Import demand will also play a significant role. Increased purchases by China and rising European exports are helping to balance out the additional supply. If buyer activity weakens, high product availability in the U.S. and Oceania could once again put upward pressure on prices.

The most likely scenario for the end of 2026 is therefore a stronger and more stable European market amid continued high global supply.

European prices have the potential to remain above their summer lows. At the same time, product availability in the U.S. and Oceania, along with high prior production in Europe, should limit the extent of further increases.

Europe has rebounded from its summer lows, but it is still not a supply-constrained market. In the first half of the year, high production and inventories put pressure on prices, while the current strengthening is primarily due to a seasonal reduction in raw material availability and the return of some buyers to the market. Competition from the U.S. and growing supply from New Zealand remain the limits to further price increases. If the European price premium continues to rise, some export demand may shift toward cheaper sources.

Mateusz Augustyniak

Board Member and Partner at Foodcom S.A.

Global Reports by Foodcom S.A.

The butter market in 2026 illustrates how quickly the balance between supply, demand, and international trade can shift. After sharp declines in the first half of the year, European prices are rising again, but the situation in key export regions continues to vary significantly.

Europe is entering a period of seasonally lower milk supply, the United States remains price-competitive, and New Zealand is increasing production as the new season progresses. The market’s direction is therefore determined by production volumes, importer activity, and price differences among the main sources of supply.

Foodcom S.A. closely monitors the global dairy market, analyzing prices, availability, and changes in international trade.