It’s a pat response to say that prices are rising everywhere because of inflation but butter takes the cake, especially during a holiday season when expectations are to eat festive sweets and savoury treats.

While large-scale bakers may be able to absorb the increases better, smaller bakers are finding their profits spread more thinly.

At CS Baked Goods in Kitchener, Ont., owner and baker Cassie Wettig says at this time of the year she will use about nine kilograms of butter a week.

She established herself during the pandemic and has survived so far.

“The more we grow, the more butter we use — especially during the Christmas season. The cost increases have definitely had a huge impact. We use butter in all of our biggest-selling items,” Wettig said.

Why prices are up

Butter pricing, and dairy in general, is complicated because of the quota system that regulates Canadian milk production.

A federal Crown corporation, the Canadian Dairy Commission (CDC) helps administrate and facilitate Canada’s dairy policy; on the other side of the milking parlour are the Dairy Farmers of Canada, an advocacy and lobby group representing about 10,000 dairy farms across the country.

When the dairy farmers make the case that they need more money for making milk, or rather helping their cows do that, the CDC considers the request and usually obliges every year. The cost of dairy products for the consumer then rises.

But 2022 was unique, according to Professor Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University.

“We’ve seen two increases. One in February and one in September. As consumers, we’re getting hit by these two increases. Butter is between 20 per cent and 26 per cent more expensive compared to last year. For bakers, that’s a big one,” Charlebois said.

Shoppers will feel a butter pinch at the grocery store, too, with prices escalating during the past year.

Butter for flavour

CS Baked Goods uses lots of buttercream icing for their cakes and shortbread cookies — the latter of which really can’t work without butter.

“We need to keep to real butter to get the best-flavoured cookie we possibly can,” Wettig said. “Every time I see butter on sale, I stock up to try to keep prices down as much as we can.”

While there are possible substitute ingredients, butter is virtually irreplaceable in the baking larder. It boosts flavour and adds, and helps retain, moisture; it’s a leavening agent too, that helps dough expand and rise resulting in flaky pie crusts and pastries and helps cookies stay light rather than dense.

With two City Café locations in Kitchener, owner John Bergen says they use about 23 kilograms of butter a week — including for their beloved butter tarts.

“We use only butter here,” he says. “For our tarts, it’s the best and the crust is like a shortbread.”

A good quantity of butter also goes into City Café’s scones, brownies and date squares.

While a local foodservice company delivers many of his supplies, he buys butter from Costco because of the lower price.

City Café has a unique business model, however — including pay-on-your-honour into an old-timey bus-transit farebox — that is designed to keep costs under control.

As much as possible, that is: with the current inflation, prices for the café’s products have gone up but not only because of the butter battle.

“We only look at food costs quarterly, and we raised some prices this year for the first time in eight years,” says Bergen. “We’re fortunate that our model works.”

‘I’ve had to eat it’

In central Kitchener, Aura-La Pastries and Provisions owner Aura Hertzog says she’s paying about $1 more per pound for butter from last year and is now paying $8 per pound for higher quality butter for baking.

At Crushed Almond Bakery Café, nearby on Frederick Street, Ferah Cagoglu has been reluctant to raise her prices, having only been open for business for six months.

However, that means she is losing money on some sales.

“I’ve had to eat it,” she says. “I’m new and don’t want to pass along a price increase to my customers.”

Sourcing butter has taken her from individual bricks to large blocks of butter and from big box retailers to travelling to Toronto for a cheaper butter source.

“The butter savings there are wiped out by the cost of travelling,” Cagoglu says.

Wettig at CS Baked Goods agrees. It’s not just the basics of butter but many cost increases that makes profitability more difficult, she says.

“We’ve been taking a slight hit on profits to be able to do the best we can for our customers. And we’ve had to raise prices to try to battle the increasing costs. In the new year we will likely have to increase prices again slightly. It’s been difficult.”