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Butter prices soar as demand increases for full-fat

Dairy experts say consumers should expect to pay 30 to 40 per cent more for butter.

Dairy experts say consumers should expect to pay 30 to 40 per cent more for butter. Photo: Getty

The demand for butter is spreading, with Australians forced to skimp on the fat affecting their hips and, now … their hip pockets.

Butter prices are rising on supermarket shelves as fear mounts that a butter shortage could hit the nation in the upcoming Christmas and holiday season.

The average monthly supermarket price of butter was up almost 32 per cent this August, compared with the same time last year, according to Dairy Australia research.

“Consumers are wanting more natural products, more people are cooking at home and more people are comfortable with dairy fat after the low-fat phenomenon for the last 40 years,” Dairy Australia senior analyst John Droppert told The New Daily.

“These are long-term market shifts that are not going to change from year to year,” Mr Droppert said.

The dairy market analyst said the “butter crisis” could be attributed to a seven per cent drop in milk production in Australia in the last year, an “out-of-balance” global supply-demand relationship and stockpiles of skim milk powder in Europe.

Mr Droppert said Australian consumers could pay 30 to 40 per cent more for butter and slightly more for baked goods, but doubted it would come to a shortage of butter on supermarket shelves.

“It’s the small to medium-sized bakers that this has genuinely been a crisis for,” he said.

“For consumers, it’s another small increase in the cost of their shopping, and the fact is consumers have been protected from the worst in the market.”

Tasmanian patisserie owner Cheryl Daci, of Hobart’s Daci & Daci Bakers, told The New Daily the increase in butter prices had been her own business “nightmare”.

The baker said she used 140 kilograms of Australian butter per week to make her croissants, brioche buns, flans and all things pastry.

But with the standard 25-kilogram block up from $135 to $250 over the past year, she estimated she spent more than $30,000 a year on the core ingredient of her pastry business.

“I’ve never not been able to order butter, but the price increase doubling over the last 10 months has been extreme,” Mrs Daci said.

“My job is to protect the business, protect the consumers from price and keep my staff in employment, but the increase in cream and butter – that’s an apprentice’s wage for the whole year.”

Patissier Penelope Ransley – a former pastry chef at top Sydney restaurants Tetsuya’s and Sepia – said her bakery in Leichhardt in Sydney, was also feeling the butter price squeeze.

The Penny Fours bakery owner said she was spending at least $5 more per kilogram of cultured butter, imported from Belgium and France since the beginning of last year.

“Croissants are my whole business, meaning my whole business is based on butter,” Ms Ransley said.

She told The New Daily customers wouldn’t absorb the butter price increase and was struggling with the wholesale component of her business.

“I’m going to have to look at doing something else, making bread and bring more focus to other non-butter products,” she said. “I cannot increase on wholesale so will have to do more retail.”

Dairy retailer Anna Burley, who trades high-end local and imported cultured butter at her shop Curds and Whey at Melbourne’s Victoria Market, said the price of butter had increased three times this year.

She pointed to the dairy crisis last year, a strong demand for “clean, green” Australian dairy products overseas and a trend towards butter over margarine and spreads for the price rise.

“Butter is really starting to make its way back.”

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