Butter woes, when will it end?

Date: 07-Nov-2007 News Blog

Most in the industry would be aware of the recent shortages of butter and many other dairy products. The global demand for butter and other dairy products has increased significantly in the last few years. China, India, Russia and many of the South East Asian countries are using more and more dairy products. On the other hand, large producers of dairy products like Australia and New Zealand have had not only prolonged drought affecting production, but also many farmers exiting the industry. The result is critical shortages during low season production.

Recently, the EU abolished all subsidies for dairy exports out of European Union member countries, the first time this has happened in forty years. This was in response to a surge in global prices for commodity products like butter and milk powder. This effects all dairy products coming out of Europe.

The dairy industry in Australia has been warning of substantial increases in dairy prices for about the last twelve months. It has finally become a reality with Bulk Butter prices doubling in recent weeks.

The supply issues experienced recently seem to be over for now, however, the news is not good in the long term. Drought and high feed costs will result in continued high prices and restricted supply coming into summer.

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