Cream of the dairy crop

Financial Mail - - DIAMONDS & DOGS BY JAMIE CARR - @jamiecarr

The av­er­age punter’s re­la­tion­ship with the na­tion’s favourite spread­able dairy prod­uct is merely that of the con­sumer. You slip down to Wool­worths for 500 g of its rich, smooth and creamy salted but­ter and per­haps half a dozen crum­pets; you wait for the do­mes­tic calo­rie con­trol’s eyes to be averted; and, watch­ing care­fully for any hid­den we­b­cams, you toast the crum­pets, dose them lib­er­ally with the good stuff and gorge un­til it’s run­ning in rivers down your chin.

As an im­pres­sion­able young­ster I was hor­ri­fied by the im­pli­ca­tions of the but­ter moun­tains that re­sulted from the EU’S Com­mon Agri­cul­tural Pol­icy. End­less streams of farm­ers pil­ing up churn af­ter churn led to vi­sions of a hideous, semi­ran­cid Mont Jaune, of­fer­ing soft land­ings at ex­tremely low speeds to un­usu­ally risk-averse skiers.

So it comes as some­thing of a sur­prise to dis­cover that but­ter has vastly out­per­formed in the past year, with the price re­bound­ing from a low of $2,601/t in May last year to its cur­rent $5,775/t.

On the sup­ply side, years of un­prece­dent­edly low dairy prices have put farm­ers un­der pres­sure, with bank­rupt­cies aplenty and herd sizes shrink­ing. De­mand, mean­while, is off the charts, as med­i­cal ad­vice does the usual see­saw be­tween in­stant heart at­tack and lovely nat­u­ral prod­uct, and but­ter sub­sti­tutes come un­der at­tack for dodgy ad­di­tives that are be­ing fingered for the swift trip to the grave.

With in­ven­to­ries flat­tened, de­mand in China grow­ing and struc­tural dif­fi­cul­ties in re­build­ing herd sizes and ramp­ing up sup­ply, the out­look for the but­ter price re­mains firm.

SA’S econ­omy looks as if it’s com­ing to the end of 12 rounds with Mike Tyson in his early days

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