Greenfields cautions on butter price

 Breaking News
  • Building the Unilever of the Future Unilever has announced the next steps in its transformation into a simpler, more agile and more focused business. The changes are designed to further drive long-term performance and shareholder value, and build upon the company’s Connected 4 Growth programme. Unilever will simplify its corporate structure. This entails moving from two legal entities – Unilever NV and [...]...
  • Irish Whiskey Association Welcomes 14% Increase in Exports in 2017 Irish whiskey exports recorded a 14.2% increase in value in 2017, according to the Central Statistics Office’s (CSO) 2017 Trade Statistics report. Irish whiskey is exported to over 135 international markets. The category saw a 16.7% increase in exports to the US, its largest export market; a 15.7% increase in exports to Canada and 9.2% increase in [...]...
  • 1 in 5 Meals Eaten Out of Home as European Consumers Favour Service Over Home Cooking More flexible menus and an increase of meal occasions from breakfast and all day brunch through to dinner has led to a €4.1 billion increase in food service sales in 2017 to €335.9 billion according to a new report launched by IRI GIRA Foodservice. One in five meals (18% of all meals) are consumed outside the [...]...
  • Nestlé UK & Ireland Cuts More Than 60 Billion Calories in Just Three Years The amount of sugar in Nestlé’s UK and Irish products has been reduced by more than 2.6 billion teaspoons since 2015 thanks to an ongoing, intensive programme of innovation and reformulation. A report, issued by Nestlé, reveals that more than 60 billion calories have also been removed from Nestlé UK & Ireland’s portfolio in the [...]...
  • Müller Targets New Segments of UK Yogurt Category Müller UK & Ireland has announced two new yogurt products as it continues to develop, manufacture and market a new generation of branded yogurt and desserts products. The dairy company, which is the Official Yogurt of British Athletics*, has revealed Müller Quark Yogurt and Müller Corner Lactose Free*, with both products launching in March and May [...]...

Greenfields cautions on butter price

May 31
17:03 2016

butter-in-a-small-bowl-550pxAccording to Greenfields Ingredients, manufacturers of ready meals, bakery products and confectionery face higher prices for butter after a surprise rally on global commodity markets.

The effects of low milk prices and a cold, wet spring across Europe have combined to push butter prices upwards, the company notes, leaving food companies exposed to the risk of rising raw material costs, which could hit their profits further if they don’t take action now and lock into a fixed price deal.

Since 15 April 2016, Greenfields says, the price of butter futures to October 2017 on the European Energy Exchange (EEX) jumped by €349 per tonne to an average of €3,012 – an increase of 13% over the period, illustrating the highly volatile nature of this important commodity.

“Food manufacturers have become accustomed to the idea that there is too much milk and that prices will continue to fall,” said Ian Thomas, Managing Director of dairy trader Greenfields Ingredients, the UK division of Greenfields Ireland. “Until recently, that’s been the case. However, milk is a natural product and its production is particularly subject to climatic conditions and, when coupled with the current commercial pressures, prices can rise sharply. As such it’s always wise to prepare for bumps in the road when prices might shoot up, just as they have in the past month or so.”

“Lower-than-usual spring temperatures and significant rainfall have prevented farmers from getting their dairy herds out on to fresh pasture. In addition, due to the poor returns they are receiving for their milk, they have chosen not push production. The latest jump in butter prices is a direct consequence of these factors and prices have risen much earlier than expected.”

How long this price surge will last is unknown, Greenfields says. However, Greenfields notes that food companies have the option of hedging against further volatility by using one of the fixed-term price models it offers.

“Prices have risen already but it’s not too late to take action,” said Thomas. “Greenfields Ireland has developed a range of pricing models that offer a straightforward way for food manufacturers to bring some certainty to dairy commodity prices over an extended period.”

About Author



Related Articles

Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • March 18, 2018ProWein
  • March 21, 2018World Olive Oil Exhibition
  • March 28, 2018FOOD INDUSTRY
  • April 4, 2018The leading event for the snack and food-on-the-go market
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber

Subscribe Here