Butter Prices:
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Linked to the price of milk, the butter price is influenced by various factors that producers cannot control. As a derivative of the dairy market, butter can experience more or less significant fluctuations in value.
If you are interested in investing in this commodity, it is important to understand the functioning of this market and to be aware of the different factors that can influence the price of milk and, consequently, butter.
To assist you in tracking your investments in the dairy market, DeftHedge offers its commodity management software. This SaaS solution has been specially designed to help businesses optimize their investments and reduce losses due to fluctuations in the value of raw materials.
Discover here all the essential information to position yourself in the butter market.
How does the butter market work?
To understand how the butter market works, it is important to first look at the milk market, as butter production is based on milk. The price of milk is determined based on certain modalities and is subject to global economic conditions, which can lead to significant fluctuations in milk prices over short periods.
This uncertainty in milk prices is a cause for concern for both farmers and investors.
Used in the production of various products, milk has a varying impact depending on the quantity used in the product. For example, the price per liter of milk used in yogurt will differ from that used in butter, as the quantity of milk required varies.
Butter, which consists of over 80% fat, is particularly affected by fluctuations in milk prices. The price of butter can be more or less volatile depending on its intended use. For instance, if butter is intended for export, its value will be subject to rapid and drastic price fluctuations depending on the state of the global market.
What is the benefit of buying butter?
As one of the most widely used commodities in the food industry, milk is a valuable commodity subject to numerous transactions.
Inextricably linked to milk prices, butter is characterized by the volatility of its value. However, in order to prevent excessively large price fluctuations in butter, certain regulatory mechanisms are put in place on futures markets.
These mechanisms help protect farmers and ensure a degree of price stability for butter. Nevertheless, losses due to fluctuations in butter prices can still occur, and it is important to manage them effectively to optimize your investments.
To conduct the best possible transactions, it is important to use appropriate and efficient tools, such as the DeftHedge software.
What factors influence the price of butter?
Depending on whether the production of milk and butter is intended for the French market or abroad, the effects on butter prices will vary.
In the case where butter is sold directly in the French market, prices tend to be more stable because producers often have agreements with major distributors that guarantee them a certain purchase price.
Conversely, for butter intended for export, price variations can be more significant. This is because the value of milk can strongly fluctuate based on global competition, production levels, and available stocks.
Like other raw materials, certain factors particularly influence the price of butter:
- Supply and demand levels
- State of stocks and scarcity
- Quality of milk
- Transportation costs
- Geopolitical factors (international conflicts, embargoes)
Considering these various elements to anticipate the evolution of butter prices is essential. To help you mitigate the risks of losses and determine the most opportune times to invest in butter, you can rely on our DeftHedge software.
How will our raw materials management software help you with butter purchases?
To assist professionals in raw materials management, DeftHedge has developed a powerful and comprehensive SaaS solution.
With this software, professionals can access multiple pieces of information about the raw materials market, including the evolution of butter prices. Thanks to this accessible data, it is now easier to develop an investment strategy and anticipate changes in butter prices.
On a daily basis, this tool will become indispensable for optimizing your transactions and defining the best strategy to adopt. To provide the best possible visibility in terms of raw materials market investment, DeftHedge has a strategy simulation function called “SmartStrategy.”
With this feature, professionals can create multiple strategies and determine which one is most suitable for achieving their objectives.
For both buyers and sellers, our software will be highly effective in their daily management. DeftHedge offers multiple advantages for butter investments:
- Portfolio management
- Monitoring the evolution of butter prices
- Creation of investment strategies
- Reduction of financial losses
- Data centralization and security
When you wish to enter the butter market, keep in mind that the value of butter will be influenced by developments in the milk market. Thanks to DeftHedge, you can easily track the evolution of these markets and adopt the best possible strategy for your investments.
To help you get started with our raw materials management software and customize its various features, the DeftHedge teams will be there to provide you with all the information and guidance you need.
With our SaaS solution, you can reduce the risks associated with raw materials and optimize your investments in butter prices.