Everything's better with butter!
So maybe it should be no surprise that butter inflation has been particularly intense in recent months.
This year, the UK saw its 12-year high in butter prices, with like-for-like rises across Europe and Asia....
Supply side issues
The supply of butter has been constrained by drought and higher feed prices on the supply side, this has apparently resulted in smaller herd sizes which means butter is relatively more expensive to produce.
And of course the climate-squeeze doesn't help this as a background factor.
And then there's increasing demand....
While the thought of butter takes me back to the 1950s, butter is actually back in fashion today.
There's something of a trend on TikTok for 'butter boards' and increasing interest in paleo and keto diets have also spurred demand.
A Financial Times (2022) report delineated that Instagram food culture has considerably driven consumption, especially among younger consumers
This surge in demand for butter also has psychological roots. In times of economic downturn, consumers turn to less expensive vices. It's like your once a week latte or trip to the nail bar, butter offers indulgence when more expansive luxuries like travel or dining out are not feasible.
This "lipstick effect" of butter—small luxuries thriving in hard times—accounts in part for the surge in demand at higher prices.
Where next for the price of butter...?
It would seem that the butter price is a reflection of cultural shifts: our desire for something easy and comforting in hard-times.
And with supply-side constraints such as rising feed costs I think it's unlikely that the price is going to come down any time soon!