In August, the price of butter was up 24.6% year-over-year and the New York Post attributes this to the rising costs of feed, energy, and dairy animals. Costs for groceries in August rose 13.5%, however, butter prices rose 24.6%, according to the Bureau of Labor Statistics. As supplies dwindle, the price for butter has surged, outpacing all other food on the Consumer Price Index.
Another issue is the amount of butter sitting in United States storage facilities, which fell 10% month-over-month in August and down 22% compared to the same time a year ago, according to the United States Department of Agriculture.
Data compiled by the USDA states that there was over 282 million pounds of butter in warehouses in August 2022 which is down from over 362 million pounds in August 2021.
The Agriculture Marketing Service’s recent Dairy Market News report shows that supplies around the nation are the lowest they’ve been since 2017. According to the data from the USDA, monthly milk production has dropped in several of the past few months due to the West having a reduced production schedule.
There are several issues that are contributing to the lower production including extreme heat nationwide causing cows to produce less milk and cow feed growing more expensive as the price of corn has risen due to global supply chain disruptions.
Meanwhile, butter makers in the Midwest say they are having trouble with maintaining cream supplies for butter making.
“The dairy industry is adapting to the increased demand as quickly as it can by increasing production and getting butter out to the market as soon as possible,” Joe Coote, chief executive of Darigold Inc., told the Wall Street Journal.
With a lot of cooking and baking to be had over the next few months, it’s best to freeze butter if you have extra on hand, but there is no need to hoard. Butter producer Land O’Lakes says that all you need to do to freeze butter is keep the sticks wrapped in their original packaging, inside the box, and put the entire box in a resealable plastic bag.
Another option is to stock up on a butter substitute which can give the same results in your recipes. AllRecipes website suggests substitutes such as margarine or plant-based butters and vegetable-based oils, applesauce, bananas, and Greek yogurt, especially for baking.
Tanner Ehmke, lead economist for dairy and specialty crops at CoBank, projected earlier this summer that “historically high butter prices are all but certain to continue for the remainder of 2022” and with supply still affected and the holiday season coming up, it doesn’t look like the prices will be dropping anytime soon.
