Its price grows only by 10 percent per year, they put it in other dairy products
The price of cow’s butter in Europe has risen by an unthinkable 83% in the last year and many bakers are scared. Because Christmas is coming and they won’t be able to cope with the increased price of sugar and cocoa, to which butter is now added. Western media reported this a few days ago.
But if one goes around the Bulgarian shops, one will see that there is no trace of such an apocalypse. The most expensive oil on the market – the French one – costs almost as much as it did 1 year ago. The cheaper German ones also keep their price, plus or minus 10 percent.
This also applies to domestically produced cow butter. Established brands cost about 10-15% on top. Yes, this is more than the average increase in the price of dairy products for the last year (which is 1.1%), more than the increase in the price of oil (1.8%). But there is no indication that the 80 percent price appreciation hysteria seen in New Zealand and Australia will carry over to our market.
If at all there was such a drastic jump there, because according to the chairman of the State Commission for Commodity Exchanges and Markets Vladimir Ivanov, in this case, they were cited
decontextualized stock trading data
“Indeed, at the end of the summer there was a jump in the price, but of the cow’s butter traded on the exchanges in Amsterdam and Frankfurt. In general, over the past year it has been selling for around $6,000 per ton, reaching as high as $7,000 at certain times. At the end of the summer, the price began to climb, reaching at one point up to $9,000 per ton, before falling back to its previous levels. The difference between 6,000 and 9,000 is exactly 50%, and if you take only this moment, it turns out that something terrible happened,” Ivanov told 24 Chasa.
However, half of the quantities of oil traded on these exchanges
is not a physically existing product,
and futures, i.e. price expectations in the near or more distant future. When there are fears about the future, these futures jump, but it does not follow that the product in the stores immediately increases in price.
Same with oil. Every time a rocket from Israel hits Lebanon at night or vice versa, in the morning oil has gone up by some dollar on the stock exchange, but by the evening its price has returned to its previous value.
The comparison with oil is not unfortunate, because just as gasoline, diesel, fuel oil, gas oil and propane-butane are different products from the same raw material, so butter is one of the many products of milk, and yogurt is also made from it. yogurt, cheese, kefir, cottage cheese, skir, etc.
What amounts of butter will come out of a liter of milk is decided in each market and by each producer. In French cuisine, a lot of oil is used, in contrast to Bulgarian, and there the producers emphasize it. Far less is consumed in our country, the Bulgarian rarely cooks and it is a peripheral product on our menu. The care of native dairy farmers is
to produce more cheese and yogurt
from the raw material, not so much butter. Therefore, it often happens that the extracted butter is used to enhance the butteriness of other dairy products, instead of being marketed. It is an open secret that the shortage of fresh milk, or rather its high price, makes many producers replace it with dry milk from Poland, Romania or Ukraine. But mixing water with dry milk produces a sloppy product, often without the taste of milk and elasticity. And many add supplements, and one of the most common is precisely cow butter.
“This is the economic logic. Producers strive for profit, but the margin from the production of butter in the processing of milk is lower than if that milk were made into cheese. And they are oriented towards it and towards cheese or other dairy products”, explained the economist Preslav Raykov. In the EU, there has been a 9% increase in cheese production over the last year, while butter production remains at the same level.
Vladimir Ivanov recalled that in almost every last year during the September-October period there was a similar increase in the price of oil in Europe. It takes place mainly in Germany and is made by the two largest dairy concerns in the country. The reason is the same – instead of the market, the butter goes for investment in dairy products with a higher added value. “However, globally its price is returning to its previous levels. The same is happening in our country – there may be an increase in the wholesale price by 10% compared to the previous year, but in the previous year it was even more expensive and now it is practically at the same level as it was 2-3 years ago”. Ivanov said.
If there is a lack of oil on the market, according to the economic logic, many producers will turn to it (and they produce it anyway), which will lead to its cheaper price. In any case, there is no prospect of its price going up, unless fresh milk production drops dramatically for some reason. Or as economists say, cow butter is a price elastic product, i.e. its price is highly dependent on supply and demand – unlike electricity and water, which it cannot do without. A Bulgarian can do without cow’s butter on the table.