Butter export from the US to Europe declines again

The American export of butter to the EU-27 has risen sharply this year up to July and reached a serious volume for the first time in a long time. However, from August onward, a downward trend has been initiated, as evidenced by American export data. Nonetheless, American butter remains cheaper. In July, more than 4,300 tons of butterfat were sold to the EU. A monthly record for this year. In August, this volume had already been more than halved to 1,986 tons. There are no official American figures for the subsequent months yet. This is mainly because the American government was inactive for more than six weeks starting in early October due to a dispute over the budget. More figures will follow in early December. The expectation is that those will show a further decline in American butter exports to Europe. Up to August, more than 10,350 tons of American butter had been sold to the EU this year, mainly because American butter was a lot cheaper, and actually still is, than European butter. Imports of non-European butter - also from New Zealand - strongly contributed to the price drop for butter that was observed in Europe from summer onward. Normally, there is hardly any American butter coming to the EU. This is for two reasons: the composition is different and there are significant tariff barriers. The import duty of the EU is generally so high that it is not profitable to bring American butter to Europe. However, this duty can be circumvented by finding a company that exports a product in the same category. This way, volumes can be offset against each other, without duty. In technical terms, this is known as 'active refining' or 'inward processing'. The largest importer of American butter is not Europe, but neighboring Canada. It imported 31,000 tons of butter up to August, a third more than last year up to August.