The decline in dairy production contributes to the rise in butter prices, as American families bake holiday cookies.
The price of butter — one of the most important ingredients for baked goods — has risen by 24.6 percent since last year, for an average price of $4.77 per unit in August, according to the Bureau of Labor statistics. Except for eggs which saw a 39.8 percent increase, butter prices have outpaced all other items at the grocery store in terms of inflation.
Consumers have paid 13.5 percent less for grocery overall prices than last year, but they’re paying 16.2 percent more for dairy products. Grocery store prices increased slightly from July to August, after record-high surges from June to July, Breitbart News documented.
According to Wall Street JournalThe main reason why butter prices are rising is due to decreased milk production, which has been caused by labor shortages and cow scarcity, as well as other factors. Farmers have however increased their herds.
According to the UDSA, July saw a 2 percent drop in butter production. Butter in cold storage has seen a 21 percent decline since June.
Minnesota dairy farmer says he had to reduce butter production by five to ten percentages due to short-staffing.
“It’s the second shift that typically runs over family time that’s become harder and harder to fill,” Marshall Reece, senior vice president with Associated Milk Producers Inc., told the Journal.
Reese pointed out that it was not an issue before the pandemic.
Another reason for the decrease in butter production is that hot summer temperatures negatively affect cows’ ability to produce milk, especially in California, where ongoing droughts have resulted in less animal feed, one dairy expert told Bloomberg.
The rising demand for butter from retailers has also contributed to the rise in butter prices before winter baking season.
Reese cautioned retailers not to “go crazy”Discounts on butter are possible during holidays because milk farmers may be too busy to produce the necessary quantity to satisfy the demand.
Follow Ethan Letkeman via Twitter @EthanLetkeman.
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