Butter prices soar as dairy production declines ahead of holiday season

A drop in dairy production is contributing to a surge in butter prices as American families prepare for the holiday baking season.

The price of butter – one of the most important ingredients for bakery products – has risen 24.6% since last year, to an average price of $4.77 per unit in August, according to statistics from the Bureau of Labor. Butter prices outpaced most other grocery items in terms of inflation, with the exception of eggs, which rose 39.8% from a year ago.

While consumers are paying 13.5% more since last year for overall grocery prices, they are paying even more for dairy products at 16.2% more. Grocery prices rose slightly from July to August, following record increases from June to July, Breitbart News reported.

According to the wall street journalthe reason for the increase in butter prices is that milk production has declined due to shortages of cows and labor, among other factors, although farmers have apparently increased their herds.

As a result, there was a 2% drop in butter production in July, while butter in cold storage is also down 21% since last month, the UDSA recorded.

A Minnesota dairy farmer said he had to cut butter production at his plant by five to ten percent due to a lack of staff.

“This is the second shift that typically stretches into family time and is becoming increasingly difficult to fill,” said Marshall Reece, senior vice president of Associated Milk Producers Inc. Log.

Reese noted that wasn’t an issue before the pandemic.

Another reason for the decline in butter production is that hot summer temperatures are negatively affecting the ability of cows to produce milk, especially in California, where ongoing droughts have led to a decrease in animal feed, said a dairy expert. Bloomberg.

Strong demand from retailers is also contributing to higher butter prices ahead of the fall and winter baking season.

Reese warned retailers not to “go crazy” by cutting back on butter over the holiday season because dairy farmers may not be able to keep up with production to supply the market.

You can follow Ethan Letkeman on Twitter at @EthanLetkeman.


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