Spreading too thin
Butter shortage pushes up cost of cakes, pies
THE country’s baking industry is nearing crisis point as a crippling butter shortage begins to push up the price of favourites such as meat pies, croissants, cakes, buns and biscuits.
Consumers face a Christmas period of pricey baked goods as butter costs hit record highs and bakeries struggle to absorb the extra expenses.
Industry insiders say that three factors are creating the “perfect storm”. Falls in production are due to the health drive towards the consumption of full-cream milk rather than skim – the fat that is skimmed off is used to manufacture butter. Shoppers have also been steadily switching to butter from margarine for health reasons, compounding the outstripping of supply. Also milk production has dropped 7 per cent in a year.
President of the National Bakery Industry Association Brett Noy said bakeries were using French butter as the cost of Australian butter had risen by 140 per cent in the past 18 months.
“Over a year ago a 25kg box of Australian butter was $100, now it hits $240. We don’t want to see a shift away from support of local dairy farmers but we are trying the best we can to keep prices down at the till,” Mr Noy said.
The industry chief says that if there is another price hike bakeries will have to consider using margarine.
“Of course we don’t want this. There will be a big impact on taste and nutritional value,” he said.
Butter production dropped by 18 per cent between 2016 and 2017 but, due to scientific evidence supporting the health benefits of saturated fats, Australians are eating more – as much as 4kg on average a year. There has been a 9 per cent growth in full-cream milk sales in the past 12 months.
Dairy Australia’s industry analyst John Droppert predicts that the butter shortage will continue until next year.