Just Before The Peak Baking Season, A Butter Shortage Is Driving Up Prices

Everything is more expensive now due to post-pandemic inflation, even food. Consumers might try to lessen the impact by cutting back on name brands, but price increases are difficult to prevent when they affect basic foods. This explains why butter scarcity is so unpleasant. Anything seems to include butter, at least everything that tastes good.

According to the Wall Street Journal, the price of butter increased shockingly by 24.6 percent over the 12 months ending in August. This shocking increase was near twice the increase in U.S. grocery prices overall over the same period, which was itself 13.5 percent, the largest annual increase since 1979.

According to reports, supply constraints are what’s causing butter prices to rise. The United States has had the least amount of butter in storage facilities since 2017. As a result, it was reported that butter prices rose to $4.77 a unit in the four weeks that ended on August 27, making it the most expensive butter since 2017.

There are numerous factors contributing to the shortages. Milk output, which reportedly typically grows year over year, recently decreased as dairy producers were negatively impacted by rising underlying prices. The fact that butter is actually at the bottom of the milk hierarchyβ€”typically sold to bottlers, then producers of goods like ice cream and cheese, before the remaining milk is processed into butterβ€”exacerbates the issue Increased production isn’t always an option when processing plants are experiencing continuous staffing shortages.

Butter Shortage Is Driving Up Prices
Butter Shortage Is Driving Up Prices

The timing, however, is particularly problematic: The peak baking season, which coincides with the winter vacations, is when butter demand is anticipated to rise. According to the USDA, several suppliers across the nation are concerned about their ability to fill all of the requests from retailers.

However, the industry is also concerned that historically high pricing may result in weaker than usual customer demand. Because of this, despite the shortage, making extra butter might be a risky endeavor.

What occurs when orders are halted? The WSJ was informed by Trevor Wuethrich, president of Grassland Dairy Products. The market crashes as everyone holds $3 butter at this point.

Therefore, keep an eye out for any butter bargains if you want to do a lot of baking this winter. You may use the chance to stockpile your own butter.

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