Amid rising product costs nearly across the board in the food sector, butter appears to be one of the most impacted by various factors.
According to Global Trade, the average price for Grade AA butter was $2.02 per pound as of Dec. 11 — up a whopping 40% year-over-year.
Market intelligence firm IndexBox cites a reduced cow herd, labor shortage and rising costs in packaging materials as constraints on production, resulting in a product shortage that has driven up butter prices. The USDA's December milk production report — released Dec. 20 — said that the US dairy cow herd was down about 47,000 head year-over-year as of November and that overall milk production was down 0.4%.
The firm notes US butter demand typically peaks in fourth quarter amid the holiday season and that prices as of Dec. 11 were up 3.7% from November.