Butter has never been dearer, with global supplies limited and shoppers scrambling to fill up ahead of Christmas baking later this yr.
Prices reached the most recent Global Dairy Trade auctionsurpassing the previous high of $7,086 in 2022. The auction, which can hold its next sale Tuesday will help set the direction for milk prices, including on the Chicago futures market.
The record prices for butter come as dairy processors worldwide use more milk for cheese production, which is in demand for foods comparable to PizzaButter, meanwhile, has enjoyed a rebound in demand since consumers began stockpiling more at home following the Covid-19 pandemic. Butter buyers at the moment are ensuring they’ve enough to fulfill demand for the year-end baking boom for holiday meals and desserts.
“US producers have not invested in butter capacity for many years,” says Mike Lynch, who sells physical inventory for Burt Lewis International in Chicago. “All the capital is going into cheese, even though butter has been the star of dairy for several years.”
In the USA, milk production is comparatively scarce because negative pressure from the highly virulent bird flu virus that recently spread to dairy cows.
The price of butter is hitting food and confectionery manufacturers who’re already facing high costs. cocoa after bean prices hit a record high earlier this yr. And although general food inflation has eased, prices for orange juice and Robusta coffee have soared this yr.
The record butter price “highlights the desperation of global buyers who are faced with a tight supply of fat during the Northern Hemisphere summer and are willing to pay a premium for local delivery,” said Alyssa Badger, vp of worldwide operations and insights at brokerage firm Highground Dairy.
Perhaps there’ll soon be an easing of the situation, no less than temporarily. Over the last two years, butter prices have fallen sharply at Global Dairy Trade auctions in early July.
