Price of butter continues to bulge

The average price of butter is rising as global demand grows for fat.

A 500g block of salted butter rose from $3.09 to $4.57 in the year to April, according to data from Statistics New Zealand.

Countdown online shopping currently showed a basic 500g block of salted butter selling for between $5.00 (on special) and $7.60. New World Thorndon was selling butter for between $4.99 and $5.49.

But prices may continue to rise as shoppers switch back to butter on toast over sugary cereals.

Taranaki resident Rachel Jane said she was frustrated butter prices remained high.

‘‘The cheapest butter has been the last few weeks is $5 for 500g, and this is promoted as a very special deal. I admit I don’t fully understand dairy prices and exporting, but this is just mental,’’ Jane said.

‘‘Three dollars was usually a great special, then $3.50, then $3.99, $4.50, now it’s currently $5 at Countdown and $5.29 at New World.’’

Countdown spokesman James Walker and Foodstuffs spokeswoman Sue Hamilton both said changes in the price of butter reflected global, wholesale prices from suppliers.

But ASB Bank economist Kim Mundy said the price rise was influenced by a resurgence in an appetite for saturated fat.

‘‘It’s more or less a loose relationship between what we see at global dairy prices and then what we see in the supermarket,’’ she said.

‘‘Supermarket prices are influenced by the global dairy trade to a degree ... but it is only one portion. If you get a sustained lift in prices of global dairy trade then that does tend to filter through into what we see in the supermarket.’’

But it also comes off the back of a recent resurgence in demand for butter – by virtue of butter being seen as less of a dietary evil compared to sugar.

‘‘It’s been global, in America, in Canada, all round the place there’s been a real lift in the demand for butter, which has been pushing up the prices.’’

Lewis Road Creamery founder Peter Cullinane said sales of his artisan butter had continued to increase since the products hit supermarket five years ago.

‘‘Every year we are seeing solid increases in demand and that will probably go across the market for all butters. I think there’s been a return to butter,’’ he said.

A Fonterra spokesperson said: ‘‘Globaldairytrade prices have continued to fluctuate over recent months and have trended upwards. These rising global dairy prices do have an impact on our production costs, but we always do our best to absorb fluctuations and avoid passing them on to our customers.’’

‘‘Every year we are seeing solid increases in demand ... I think there’s been a return to butter.’’ Lewis Road Creamery founder Peter Cullinane