Global Butter Crisis: Soaring Prices Threaten Bakeries and Consumers Worldwide

The average price of butter has exceeded $7,200 per metric ton, down from May but still 54% higher than the same period two years ago, according to data from the United Nations Food and Agriculture Organization (FAO).

This increase is due to the decline in global milk production, caused by drought and diseases that have reduced the number of cows, leading to a drop in production. Furthermore, a supply increase of around 0.5% is expected in the European Union, the United States, New Zealand, Argentina and Australia this year.

The milk produced is primarily distributed to manufacturers of liquid milk and producers of ice cream, yogurt and cheese. At the same time, the butter industry is facing additional pressures due to the increase in demand for whey proteins, which have gone from being a by-product of cheese making to a multi-billion dollar market.

In such a context, countries like Poland have been forced to put a thousand tons of their reserves on the market in order to maintain prices. While the issue has fueled political debates in New Zealand, it has raised fears of shortages of certain butter-based products in France. Consumers are the first to suffer from the high prices of baked goods and products containing butter.