What are the reasons for the global rise in butter prices?

Rising butter prices are affecting European consumers and bakers.

As the end-of-year holidays approach, Europeans are faced with bad news: the soaring price of butter.

Across the 27 member states of the European Union, the price of butter increased by 19% on average between October 2023 and October 2024.

According to EU figures, this increase was 49% in Slovakia and 40% in Germany and the Czech Republic, and reports indicate that this is not going to stop any time soon.

In Germanya 250 gram stick of butter generally costs between 2.40 and 4 eurosdepending on the brand and quality.

According to the economist Mariusz Dziwulskiagricultural and food market analyst at PKO Bank Polski in Warsaw, this increase is the result of a global milk shortage due to a drop in production, in particular United States and New Zealandone of the largest butter exporters in the world.

European butter generally has a higher fat content than butter sold in the United States. It is also sold by weight in standard sizes, so food producers cannot hide price increases by reducing package sizes, which is known as “shrinkflation.”

A shortage of butter in France in the 19th century led to the invention of margarine, but the French remain among the continent’s largest consumers of butter, particularly for pastries and sauces.

Poles hit hard

Butter is so important in Poland that the government keeps a stock of it in the country’s strategic reserves, in the same way as national gas and Covid vaccines. The government announced on Tuesday that it was releasing some 1,000 tonnes of frozen butter to stabilize prices.

The price of butter increased by 11.4% between the beginning of November and the beginning of December in Poland, and 49.2% over the past year, to reach almost 37 Polish zlotys (8.7 euros) per kilo for the week ending December 8, according to the government agency, the National Agricultural Support Center.

Consumers have noticed. “Every month butter becomes more expensive,” said Danuta Osinska, 77, as she shopped at a discount chain store in Warsaw.

She and her husband love butter, but they struggle to pay for medicine with their small pensions. They now consume less butter and more margarine, even if they like the taste less.

“There is no comparison possible“, Ms Osinska said. “Things are getting more and more difficult.

The cost of butter in Poland has become a political issue. With a presidential election scheduled for next year, opponents of centrist Prime Minister Donald Tusk are trying to blame him and his Civic Platform party. Other Poles want to blame the governor of the national bank, who belongs to an opposing political camp.

According to Agnieszka Maliszewskadirector of the Polish Milk Chamber, some consumers decide where to shop based on the price of butter, which has led to price wars between grocery chains that in some cases have kept prices artificially low in the past, to the detriment of dairy producers.

Agnieszka Maliszewska believes that butter inflation can be explained by national, European and global problems. She says the main cause in Poland is a shortage of milk fat due to dairy farmers closing farms due to weak profit markets and their hard work.

She and others also cite rising energy costs due to Russia’s war in Ukraine as affecting dairy production.

The economist Mariusz Dziwulski also thinks that droughts can be a factor in reducing production. Falling milk prices last year discouraged investment and pushed EU dairy producers to make more cheese, which he says is more profitable.

An outbreak of bluetongue, an insect-borne viral disease that is harmless to humans but can be fatal to sheep, cows and goats, could also play a role, Dziwulski said.

Olive oil, the favorite “butter” of people in southern Europe

Southern European countries, which rely much more on olive oil, are less affected by butter inflation – or they simply don’t consider it as important since they consume much less of it.

Since last year, the cost of butter has increased by 44% on average in Italyaccording to the dairy market analysis company CLAL. Italy is Europe’s seventh largest producer of butter, but olive oil is the preferred fat, even for some desserts. The price of butter therefore does not arouse the same concern there as in the regions of Europe which are addicted to it.

Are croissants in danger?!

In Paris, the pastry chef Arnaud Delmontelwho makes croissants and pain au chocolat for his own pastry shop, says he saw the price of butter climb by 25% since the month of September alone.