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The United States is experiencing a butter scarcity just before the holiday season.
According to US Department of Agriculture data, the volume of butter in US storage facilities declined 10% month over month in August. However, it was down 22% from the same period last year.
According to USDA data, there were over 282 million pounds of butter in warehouses last month, down from over 362 million pounds in August 2021.
According to the Agriculture Marketing Service’s most recent Dairy Market News report, supply remain limited across the country. According to the research, demand is outstripping supply in the West, where producers are operating on restricted production schedules.
Meanwhile, according to the study, “spot loads of cream are very tight to unavailable” in the Midwest, and “in the Northeast, retail butter demand is rising up, but low stocks are leading some manufacturers to limit supplies across current orders.”
As supplies deplete, the price of butter has risen faster than the price of any other food on the Consumer Price Index.
According to the Bureau of Labor Statistics, grocery prices jumped 13.5% in August, but butter prices rose 24.6%.
Tanner Ehmke, CoBank’s head economist for dairy and speciality crops, predicted earlier this summer that “historically high butter prices are almost expected to prevail for the duration of 2022” as shortages persist.
According to a recent June analysis by Ehmke, the supply issue is the consequence of US dairy producers and butter processors trying to boost production owing to increased feed, energy, heifers, and even personnel expenses.
“Some churns are decreasing output due to limited US milk supply and facility manpower,” Ehmke explained.
According to USDA data, monthly milk output has decreased in many of the last few months, including June. According to the USDA, milk output in the United States was down about 1% year on year from January to June.
Labor shortages have simply “exacerbated existing supply challenges,” according to Ehmke.
However, due to limited milk and cream supply, Ehmke recently warned that cheesemakers may experience production challenges.
“Competition for limited milk would put cheese makers at a disadvantage compared to butter manufacturers, who are better positioned to pay higher milk costs,” Ehmke added.
Higher pricing “will reduce cheese processor profits, resulting in decreased cheese output,” he noted. “At present prices, cheesemakers will not want to accumulate extra stockpiles for the months ahead,” despite the fact that it will make more milk accessible for butter churns.
What do you think of that butter shortage? Please let us know in the comments.
