The nearing holiday season, the eastern European war spillover and high demand are all making butter prices in USA dear.
According to the U.S. Department of Agriculture (USDA) in its November 8, 2024 market report, grade AA butter averaged $2.65 a pound.
The ongoing Ukraine-Russia war is not helping either for it is forcing imports from the U.S. by European markets. In Russia itself, official records show the soaring of butter block prices by 25.7% from December 2023 through November 2024.
This is why cumulative American dairy exports to other regions, especially Europe, have climbed by 23% over those of 2023.
At the same time in November 2024, the U.S. succored high local demand by importing 15.6 million pounds worth of dairy.
A spot check on the Q3, 2024 dairy auction at the Global Dairy Trade also reveals strengthening bulk order butter prices. Apparently, white butter sold at $6,990 per tonne, equal to $3.17 a pound at the latest auction.
The above is however below the July 2024 record auction of $7,350 a tonne, which even eclipsed 2022’s peak of $7,086.
In retrospect, the retail butter price had last hiked dramatically in early January 2022, to $2.66 a pound.
Two Domestic Factors
According to Fortune in July 2024, the hike partially owes to customers securing early supplies before the oncoming holiday season.
Two months on in September, reports were showing that American consumers bought more butter than in the recent past. Imports of dairy alone were 59% higher in September than at a similar time in 2023.
This indicates a fear that any shortage of butter could have a spillover effect on related holiday-time products like confectionery. Similar parallels occurred when cocoa shortage hiked chocolate products.
There is also the bird flu scare on the American dairy herd, which made milk products scarce for sometime.
Luckily, the bird flu situation is under relative control. Exports have consequently strengthened this fall after the temporary ban on dairy sales across state boundaries back in spring 2024.
Therefore, the price of butter in the U.S. is spreading thin on the customer’s pocket despite a recovering dairy sector. To learn more on the historical American butter pricing trends, skim the follow up data section.
Butter Prices in USA Statistics
Butter is a key food ingredient in American breakfast as a bread spread, and a regular component in confectionery. Hence demand and supply factors can affect its cost drastically. According to the U.S. Federal Reserve, in the six-year period starting April 2018, butter was costliest in September 2024 at $5.004 a pound. Its nearest rival peak price during this custom period was in January 2023, at $4.882 per pound.
By what percentage has the price of butter in USA trended since WWII?
Butter has never cost more in the U.S. since World War II as it does now in 2024 due to inflation. According to data site “In 2013 Dollars,” butter in the U.S. costs 2,018.11% more in 2024 than in 1939. This is partly due to increasing inflation in the intervening period of 85 years. For instance, American butter which historically cost $2.92 a pound in 2006 would cost $3.35 at the 2024 dollar inflation rate.
How does European and American butter compare in market prices?
Data from the Chicago Mercantile Exchange shows butter sold at $6,990 a tonne in week 1 of November 2024. In comparison, Western European markets sold it at $8.075 per tonne before November 8, 2024. This means that while it was expensive in the U.S., in Europe it was even dearer.