Butter prices have fallen to their lowest level since November 2021, dropping to $1.96 1/2 per pound on the close of Wednesday.
Ever.Ag dairy analyst Katie Burgess says the sharp decline raises key questions: Why are prices falling at a time when demand typically increases, and could consumers see more aggressive grocery store promotions heading into the holiday season?
Burgess says the collapse is largely driven by record-high butterfat levels on U.S. dairy farms.
Advances in genetics and nutrition, such as improved genomic testing and specialized feed, have boosted the fat content in milk.
This has led to an abundance of cream and, in turn, a surge in butter production.
With bulk butter supplies swelling, prices have sunk to four-year lows, an unusual trend for late summer when prices typically rise.
“In a typical year, you tend to see the price for bulk butter spike in September and October, right as we’re heading into that holiday baking season,” Burgess explains.
