Europe faces Christmas butter crisis, dairy processor warns
'There is a big lack of fat, cream and butter products everywhere in Europe'
Milk prices are set to rise in Europe as the continent faces a shortage of milk, cream and butter by Christmas, the head of one of the world’s biggest dairy companies has said.
Global milk prices, which are up about 28pc from 12 months ago after producers cut output, have stabilized in recent months but Peder Tuborgh, CEO of Danish-based dairy co-operative Arla Foods, said world milk stocks were very low.
“There has been a scarcity of milk in the whole world after the very low prices last year,” he told Reuters.
“There is a big lack of fat, cream and butter products everywhere in Europe. It will not at all be possible to meet demand up to Christmas. It is those forces that are dragging up the prices significantly,” Tuborgh said.
Milk prices rallied earlier this year after European producers cut output last year following the scrapping of EU milk quotas in 2015, which had led to a sharp fall in prices.
Arla, a co-operative owned by 12,500 farmers in Denmark, Sweden, Germany, the UK, Luxembourg, the Netherlands and Belgium, said on Friday it would increase the price it pays for milk from its farmer owners for a third consecutive month in September, by one (euro) cent per kilo to 38.3 (euro) cents per kilo, and could raise it again before the end of the year.
“After that we might increase it one more time this year, but that is a bit uncertain,” he said.
The coming spring season in New Zealand will be key to further price moves in the global milk market, analysts have said.