Cream of the dairy crop

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