- Butter costs might escalate even more.
Recently, the cost of butter has seen a significant surge, which might mean consumers needing to dip into their savings a bit more soon. This was validated by industry associations to the German Press Agency. As per the managing director of the Milk Industry Association, Björn Börgermann, "We're currently witnessing unusually high block butter prices in official quotations, a situation we've never encountered before."
He attributed this rise to lesser milk volumes supplied by farmers and a decrease in the fat content of raw milk. Due to high demand for other dairy products like cheese, there was less fat available for butter production. Moreover, considerably less butter was imported. This trend was previously reported by "Lebensmittel Zeitung".
Over the past few months, butter prices have shown a notable surge. In July, it cost approximately 21% more than a year prior. Exactly when and how much consumers will pay remains uncertain, according to Börgermann. "Price is determined by supply and demand, and the retail price is ultimately set by the food retail trade." The retail sector was hesitant to comment on potential price hikes. Philipp Hennerkes, the managing director of the Federal Association of the German Food Trade (BVLH), stated that the scarcity of value-determining raw materials impacts calculations in production and distribution.
Aldi Nord, Lidl, and Rewe declined to comment on the price development.
"Prices have always fluctuated"
The Federal Association of German Dairy Farmers (BDM) reported that wholesale prices for block butter have already surpassed the 2022 high of 7.95 euros per kilogram. According to Hans Foldenauer, the spokesman of BDM, as the holiday season concludes, so will prices for packaged butter. These figures pertain to the prices paid by trading companies. Consumers can expect to incur price hikes from the producers, which will subsequently be passed on to them.
There's no indication of an end to this price surge in the milk industry, according to Börgermann. The milk volume is anticipated to decrease further for a few more weeks, following the typical annual trend. However, he emphasized, "Prices have always fluctuated."
Currently, a 250-gram packet of German brand butter costs 1.99 euros, as per data from the price comparison portal Smhaggle. Butter prices have historically shown significant volatility. In 2022, they peaked at prices above 2.50 euros and dropped down to as low as 1.39 euros per packet in 2023. According to the Federal Statistical Office, consumers paid 39% more for butter in July 2024 compared to 2020.
The number of milk cows and dairy farms in Germany has been declining for years. In 2023, there were still 3.7 million animals and roughly 50,600 operations.
The industry associations confirmed the increase in butter prices to the German Press Agency, aligning with the observations made by the Milk Industry Association. Due to less milk supply and decreased fat content in raw milk, the prices of block butter have skyrocketed, as reported by the German Press Agency.
