Butter Oil Price Trend Analysis 2026: Historical Prices, Price Drivers, Supply Demand Analysis, Latest News & Market Insights
Butter Oil Price Trend Q1 2025
The European butter oil market experienced mixed trends during the first quarter of 2025. Early in the quarter, prices declined as buyer sentiment weakened, and the market corrected after a period of record highs. This downward movement was supported by increased availability, stable milk fat output, and softened demand. However, as the quarter progressed, supply-side tightening began to shift market sentiment.
Contributing factors included reduced herd sizes, higher milk fat content, and trade uncertainties between Europe and the U.S., all of which introduced renewed upward pressure. The market reacted quickly buyer interest rebounded, contract activity increased, and prices began recovering noticeably toward the quarter’s end.
In parallel, butter oil prices in the Indian market remained relatively stable throughout the quarter. Consistent domestic demand and favorable pricing helped India maintain a competitive position globally. While Indian whole milk powder and skimmed milk powder encountered price pressure, butter oil sustained a steady export trajectory, drawing continued international interest.
Production levels remained stable, with diverse milk variants enabling effective market coverage without triggering surplus-related concerns. In contrast to milk powders, which faced persistent demand challenges, butter oil demand showed resilience in both domestic and export markets.
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In 2024, there was heightened volatility in Europe's butter oil market spurred by high demand, limited milk availability, and changing priorities in the dairy industry's production. In the first half of the year, prices trended higher due to tight consumer and industrial demand.
Despite adverse weather conditions across several European regions, milk supply remained stable. But processors increasingly diverted milk to more profitable products such as cheese, reducing the supply of butter oil. This tightening of supply, together with strong domestic and export demand, continued to push butter oil prices upwards.
The latter part of the year also saw continued price increases, leading to regulatory action in some markets. Strategic reserves were released in certain countries to relieve pressures domestically, and small scale producers struggled to manage high levels of input costs.
Market sentiment was also driven by tight global milk production that held below historical levels. This was worsened by disease outbreaks in dairy herds across much of Western Europe, causing additional uncertainty around production continuity. Butter oil production continued to be depressed as producers held back the good quality milk for cheese and other value-added dairy products, putting further pressure on supply of the feedstock.
Butter oil markets were observed to be closely following the feedstock butter prices during the given period of H2’23. In the Asian markets, the prices started slow in July as the downstream demands were still muted in the summer months of the third quarter. However, as the fourth quarter began, the market offtakes picked up again. A pivotal surge in raw material milk prices also pushed the butter oil price graph upwards.
The market situation was not much different in the European and American markets as the prices here too varied in a similar manner. The third quarter was more muted than the fourth quarter. Festivals and holidays were also responsible for an increased butter oil demand from the food and beverage industries. Overall, positive market sentiments were witnessed.
The price trend for butter oil closely mimics that of its feedstock butter. The prices of butter oil remained fluctuating in the first half of 2023. Prices rose in the Asian market because of the rise in consumption. The Chinese buying sentiments rose in the post-lockdown world as more people switched to processed and packaged products.
On the other hand, the European and American markets experienced stable market sentiments after a long time. Given the unprecedented highs last year, the prices stabilized in the said period as supply chains and trade normalized. The increase in product availability lowered the upstream costs, eventually leading to lower prices. Further, the price trends for butter oil declined in the later Q2’23 as the supply overtook the downstream demand.
About Butter Oil
Butter oil refers to the fat-concentrate that is derived primarily from butter or cream, practically by the elimination of all the water and nonfat solids. Butteroil is a rich source of vitamin K and is generally extracted from the milk of cattles fed with growing green grass and green leaves. It should contain at least 99.3% milk fat and has long shelf life than ghee or butter.
Butter Oil Product Detail
Recombination with skimmed milk powder, Instant milk powder production, Baking, Chocolate manufacturing industry
Fonterra Co-operative Group, Dairy Farmers of America Inc, Hilmar Cheese Company, Inc, Lactalis Group, FrieslandCampina, Westland Milk Products
Regional Coverage
Asia Pacific
Europe
North America
Latin America
Africa
CurrencyUS$ (Data can also be provided in local currency)
Supplier Database AvailabilityYes
Customization ScopeThe report can be customized as per the requirements of the customer
Post-Sale Analyst Support360-degree analyst support after report delivery
Note: Our supplier search experts can assist your procurement teams in compiling and validating a list of suppliers indicating they have products, services, and capabilities that meet your company's needs.
Butter Oil Production process
- Production of Butter Oil via Centrifugation.
Butter Oil is oil derived from butter. In order to produce Butter Oil, melted butter is passed through a centrifuge and the milk solids are separated by centrifuging it and separating the oil directly from butter.
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