Butter prices break records. Experts indicate a surprising reason

Butter prices have not been so high for years. At the Tuesday auction of dairy products on the Global Dairy Trade (GDT) platform, butter was one product whose price increased. Already two weeks ago his value broke the threshold of 7,000. dollars per ton. Tuesday’s price of butter reached the level of $ 7378 per ton, which means an increase of 2.2 percent.

What is happening on the dairy market and why the cube of butter we buy in the store achieved such an astronomical price? Completeness explains in an interview with “Wprost” dr hab. Eng. Andrzej Parzonko, prof. SGGW from the Department of Economics and Organization of Enterprises of the Institute of Economics and Finance of the Main School of the Countryside Farm in Warsaw.

Why is the price of butter so high?

As explained by prof. Andrzej Parzonko, all political and climate crises, visible on the global market, affect the European market, including Poland. This can be seen perfectly on the example of butter.

– The price of butter on the market in Europe fired quite strongly. This is due to the fact that the demand for butter has increased on the world market. A similar situation took place during a pandemic and at the outbreak of the war in Ukraine. It can be observed that, as in that time, now China is starting to make supplies, for example butter – says prof. Parzonko.

And as he admits, you don’t know what’s going on, but it doesn’t look good.

– Perhaps this is the result of changes that occur in the United States after the presidential election. The trade war between the States and China is already reality and will probably get worse. The new President of the United States announces the possibility of trading with China, as well as with European countries, which can be the cause of turmoil on the world market, which we also feel in Poland – believes the scientist.

Butter on the global market

New Zealand leads the way on the global dairy market. It is the largest exporter of these products (95-97 percent) to the Asian market. Asia, in turn, is the largest dairy importer. As explained by prof. Andrzej Parzonko, if China increases the import of butter, the markets react.

– Due to the fact that we are connected to the global market, we also have expensive butter in Poland – explains the expert, indicating that Poland has 20 percent. The surplus of milk production, which must be exported in the form of dairy products.

– The share of butter exported from Poland in the export structure of this product from the EU is relatively high and ranged from 18.3 percent. in 2020 to 25.6 percent in 2023. In the group of countries characterized by the greatest import of this product from Poland were mainly European countries, of which the Czech Republic and the Netherlands were most important. Unfortunately, Poland is not significant in the export of butter to non -European countries. Part of the butter exported from Poland to other EU countries is recovered to Asian countries. This is mainly done by the Dutch, who buy butter from us cheaper, and sell to other markets more expensive – notes prof. Parzonko.

Will the butter stand?

As explained by prof. Andrzej Parzonko everything depends on the economic and political situation.

– What is happening on the dairy products market, including butter, results from global conditions, and we are included in this global system and market turmoil. They have an impact on the Polish market and if doubles as a result of political activities, we can feel deeper turbulence on the dairy market – explains the expert and illustrates with a hypothetical scenario in which China would stop buying dairy products from Europe or Europe, pressed by the United States, would stop selling them to China.

– Then the prices of butter and other dairy products may fall in the short period. Consumers would be happy, but producers no longer. Unfortunately, political decisions and climate change in the global world determine the market of dairy products – sums up prof. Parzonko.