OT The price of butter

[Broadback]

Can anyone explain why the price of butter has increased do much recently? Milk and cream prices have more or less remained stable. I am puzzled.

[spuorgelgoog]

Consumption is increasing as people now see butter as healthier and more natural than manufactured spreads, and China is making more European-style pastries with butter.

Butter, being dense, is more vulnerable to global demand than milk and cream, which aren't economic to ship round the world in liquid form. We can import dried milk very easily though, which can be used as a manufacturing substitute for a lot of fresh milk, but not for butter.

Owain

[Robin]

plus devaluation of Sterling given (as you say) butter is now more of a global commodity

not helped by last year's weather

[alan_m]

The price of British butter has risen substantially in the recent few months. Thus can have nothing to do with the devaluation of Sterling. British cows producing British milk (which has had no price increase) with the butter being British manufactured and sold in the UK.

[whisky-dave]

Yeah but , no, but, yeah, well Brexit, British and Butter all start with B isn't that enough proof ;-)

[Dave Plowman (News)]

Really? It's a global market these days. If the price of butter worldwide came down, would you be happy to pay more for UK produced?

[michael adams]

The price of anything is not simply determined by production costs. The price of British Butter is not simply determined by the price or availablity of British milk but by the level of demand and the price of alternative sources of butter.

Basically if alternative sources are charging more then this will drive up the price of British Butter as well. Otherwise if British Buttter were kept artificially low, then it would all be bought up by Johnny Foreigner who would then sell it on to the China at a vast profit. And there would be none in the shops at all.

Basically if more butter is being exported to say China without a corresponding increase in capacity * then the overall price of butter must go up, from whatever source.

There will presumably be an appreciable lag between an increased demand for butter making plant and machinery and its actually coming on stream. Presumably providing the extra cows won't be so much of a problem.

michael adams

...

[Robin]

I've not noticed that but Owain did mention global demand.

In any event I was taking recent to mean recent years given the ONS figures for retail butter are pretty well flat for the past year (between 178 and 182 pence) but with big increases earlier (from c.135 pence in Spring 2016)

Similarly wholesale butter prices from the AHDB also show a big rise after June 2016.

That may just be a coincidence but dairy farmers also used to argue they are exposed to rate fluctuations.

And FWIW the AHDB also seem to think farmgate milk prices have risen in the past 3 years.

[spuorgelgoog]

If there are the farms for them to live on and the farmers to look after them.

A lot of farmers are getting out of dairying as it's hard work for little return on basic milk. Once the milking parlour is demolished it's a huge capital commitment to rebuild it.

Owain

[whisky-dave]

That goes for any product. I remmeber when we first joined the EEC the butter mountain, but rather than sell it to the EEC they virually gave it all away to Russia. And controlled by the EEC.

[Dave Plowman (News)]

You wanted to increase your butter consumption to get rid of that mountain? Didn't realise you were so poor that any food at all would do.

[whisky-dave]

No most consumpion in the UK were going over to margarine for health reasons. Production of butterc excceded demand for many years.

And it started in the mid to late 70s and didn;t end until 2017. That's quite a long time it took the EU to sort the problem out to stop over production. why did it take so long ?

[Brian Gaff]

Well, look also at biscuits and how well known brands change price. I think its marketing, not a lot else, frankly. We will wait till we have a butter mountain then they will drop them to get rid of them. Brian

[Harry Bloomfield]

alan_m presented the following explanation :

Milk some months ago was £1 for 2L, then it increased to £1.10 and now from the same shops is £1.20 - I would call that a substantial increase.

[Tim Streater]

Perhaps the supermarkets have stopped paying the farmers less than the famers' production costs.

[whisky-dave]

Is that because we've left the EU ? Perhaps if you want cheaper milk use your time machine to go back a few months rahter than forward a few months ?

[bert]

CAP Remember also the milk and wine lakes

[Andrew]

I would call it a massive loss-leader (at £1 for 4 pints), used by the supermarkets to get the punters in the door, paid for by the farmers who didn't even get enough to cover the cost of producing it.

The only producers who did make money, did so because they had

300+ cows, all Holstein, which are bigger and lankier than Friesians and produce about 3 times as much milk but at a cost to the animal where lameness and udder problems are difficult to avoid.

My uncle milked about 40 friesans back in the 70's and made a comfortable living out of it, but at todays prices he would lose thousands every year. My cousins sold the cows the day after he died.

The cows at least were happy, without the massive udders and foot problems that todays milk factory-on-legs suffer from.

You didn't see their ribs sticking out either, when most dairy cows were friesan.

[Andrew]

UK Liquid milk has fallen dramatically in recent years as the supermarkets sold milk as a loss leader to get the people in the door.

This means less spare milk for cheese and butter.

Also, a lot of people are now realising how much damage has been caused by burning thousands of square miles of rain forest so that palm oil can be planted. I read the lebels very carefully and try to avoid buying anything that contains it, but it's almost impossible.

Palm oil, like sugar has been the food manufacturers goto ingredient of choice, having previously been gorging on hydrogenated vegetable fat. The public are now getting choosy.

[Dave Plowman (News)]

Then explain how supermarkets charge differing amounts per pint or whatever depending on the container size?

Do the farmers supply special milk for that loss leader?