Record butter prices leave bakers with indigestion
Squeeze on butter churns exacerbated by huge demand for whey protein, originally a waste product of cheesemaking
One of life’s little culinary pleasures — taking a bite out of a freshly baked croissant — grows ever more expensive. Across the globe, record butter prices threaten the affordability of an everyday indulgence.
The UN Food and Agriculture Organization’s butter price index is at an all-time high, according to the latest reading in June. An imbalance between supply and demand suggests little relief in sight. At the most recent Global Dairy Trade auction, which helps set the direction for dairy prices, butter reached an average of more than $7,200 per metric tonne. While that is down from the highs set in May, it is still 54 per cent higher than two years ago.
In Poland, the cost of butter was elevated enough that the government announced plans in December to sell off 1,000 tonnes of its reserves in a bid to curb the surge. In New Zealand, the issue has become a topic of political recrimination. In France, where butter consumption per capita is among the highest in the world, there are growing concerns over supply shortfalls. Grim news for lovers of the Kouign-amann, a Breton pastry made nearly 30 per cent of butter.
The problem with butter starts with milk. The global dairy industry is experiencing a decline in milking cow herds amid droughts and diseases. That has kept a lid on production. World milk supplies from five leading producer regions — the EU, US, New Zealand, Argentina and Australia — is forecast to grow less than half a percentage point this year.
In the hierarchy of dairy processing, bottlers are typically first in line to get milk. Then come makers of ice cream, yoghurt, cheese and butter. In recent years, competition for cream — a key component of butter — has grown as low-fat diets have faded in popularity and consumers, especially in the US, Middle East and Asia, return to higher-fat dairy products.
The squeeze on butter churns has been further exacerbated by the explosion in demand for whey protein. Originally a waste product of cheesemaking, whey is now a multibillion-dollar industry, giving dairy processors more reasons to devote more milk to making cheese instead of butter.
The high price of butter will be felt by food and confectionery makers who are already facing high costs for cocoa after prices for beans hit a record earlier this year. Those who make premium products — or bakeries with a captive audience — will presumably do their best to pass along higher raw ingredient costs to buyers of dairy-based goodies and flaky breakfast treats. Quel dommage!
