Muddy bun craze bumps butter price
Enjoy that hot cross bun smeared with golden goodness while you can because butter prices are set to rocket.
Kiwi butter lovers may have to dig deeper into their wallets for their favourite creamy spread later this year as low supply and a Chinese craze for a new buttery bun cause a large spike in prices.
Butter prices lifted for the tenth consecutive time during the latest Global Dairy Trade action, up 42 per cent since the start of the year. Prices were below US$4000/tonne at the start of the year and had jumped to US$5544/ tonne after the most recent auction.
That price hike will not start to hit New Zealand retailers until July-August with current prices still reflecting the period from late last year when the GDT went through a period of consecutive falls.
According to Statistics New Zealand’s March food price index, prices for a 500g block fell from $5.20 to $5.11 between February and March.
Yesterday Countdown offered 500g of Tararua butter on special for $4.80, down from its usual price of $5.80.
‘‘Retail prices are always slow. Assuming the spike lasts for the next few months, we’ll see it in the supermarkets this year. It does take time to filter through,’’ ASB Bank senior rural economist Nathan Penny said.
He predicted prices would go close to hitting the record highs seen in 2017.
The price hike was due to what was occurring in both New Zealand and abroad. The local dairy season had ‘‘turned on a dime’’ from a positive outlook in December to talk of a possible drought. This coupled with low outputs from other dairy producers saw a fall in supply.
‘‘There’s just not a lot of milk out there and we know that demand is still pretty good,’’ Penny said.
That demand was centred around a global trend that butter was more healthy than polyunsaturated products, such as margarine. China had also emerged as a major butter buyer, fuelled in part by demand for ‘muddy buns’ made from chocolate pastry which were being avidly shared across social media.
It meant good news for dairy farmers with Penny predicting an opening forecast of around $7/kg milk solids.