The market outlook is challenged due to the global spread of coronavirus, the impact on supply chains, the collapse in the food service sector and the steep decline in oil prices.

The collapse in the food service market has been offset by elevated retail demand. The true uplift in retail demand will become known as panic buying eases. The immediate and sudden collapse in the food service market is expected to result in milk being diverted to butter/SMP. Global milk supply is expected to exceed demand as milk supply recovers in the Northern hemisphere, somewhat offset by more muted supply in the Oceania region. The EEX Butter Index is at €3357/tonne with the Dutch quotation lower at €3300/tonne, down €200/tonne on last month. The SMP Index is at €2215/tonne, down €350/tonne on last month. The future is very uncertain as buyers are extremely hesitant to commit under current circumstances and the lack of refrigerated containers is adding cost to the supply chain.