The latest Dairy Market News report from the Agriculture Marketing Service shows that supplies across the country are very balanced and tight. In the report, officials say demand is outstripping supply in the West, where producers are running reduced production schedules. Meanwhile, Midwest buttermakers say “spotloads of cream are severely reduced to unavailability” and “in the Northeast, retail demand for butter is increasing, but tight inventories are causing some producers to trim supplies on existing orders,” according to the report. H.
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As the supply dwindles, the price of butter rises and surpasses all other food in the consumer price index. Grocery costs in August rose 13.5%, however, butter prices rose 24.6%, according to the Bureau of Labor Statistics. Tanner Ahmeke, lead dairy and specialty crops economist at CoBank, predicted earlier this summer that “historically high butter prices will continue almost to the end of 2022” as the shortage continues. In the latest June report, Ahamka said the supply problem is a result of US dairy farmers and butter processors struggling to increase production due to rising feed, energy and cow costs.