Energy and feed prices rise due to war in Ukraine
Butter price rises 83%, 1 ton 11.87 million won
European industry fears that “specials will disappear”
About two months before Christmas, the price of butter, along with eggs and sugar, has risen sharply, raising the prospect that the Christmas cake special may disappear in the European baking industry. As a few large food companies are aggressively securing the butter needed to produce Christmas cakes, it is becoming difficult for small bakeries and pastry companies to secure butter.
According to Reuters on the 14th (local time), as of the 29th of last month, the price of butter in the European Union (EU) rose 83% compared to the same period last year. At $8,706 (approximately 11.87 million won) per ton of butter, it was the most expensive butter price ever in Europe. In most European countries, various Christmas events are held starting in November, and the demand for Christmas cakes increases explosively from this time until the end of the year.
Paul Boisvin, director of the French Bakery and Confectionery Federation (FEB), said, “Big companies in the food industry have prepared the butter needed to produce Christmas cakes, but small bakeries cannot,” adding, “Concerns are growing in the baking industry about the sharp rise in butter prices.” He said.
The rise in butter prices is also occurring outside of Europe. Although slightly lower than the highest price recorded this summer, butter prices in Australia and New Zealand are also higher than the same period last year. This month, the U.S. Department of Agriculture also raised its forecast price per pound (0.45 kg) of butter to $3, 15% higher than last year.
Experts say that while demand for butter remains steady, the decline in milk production is the cause of the price increase. This is because energy and feed prices have become expensive since the Ukraine War, and to make matters worse, abnormal climate events such as droughts and floods have become more frequent, causing great damage to the dairy industry. The dairy industry has steadily reduced cow numbers in recent years to reduce costs.
The fact that dairy processing companies are focusing on producing other processed foods, such as cheese, which are more profitable than butter, is also considered to be the cause of the butter shortage. According to EU data, as of this summer, cheese produced in the EU increased by 3.2% compared to the same period last year, but butter decreased by 1.6%.
“Farmers will need to increase milk production to stabilize high butter prices,” said Susan Kilsby, an analyst at ANZ Bank in New Zealand. “It could take several more months before we see any significant price declines.”
Reporter Lee Cheong-ah [email protected]
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