Butter Production is a Problem!

As mentioned in the prior article, cheese production is growing nicely and seems to have a good balance of wholesale disappearance and inventories.?By contrast, butter production is shrinking, wholesale butter disappearance is declining, and inventories are low.?As result, butter prices continue to rise to record highs.

As shown below in the chart below, butter production (the?blue?line) began falling in early 2021 and has continued to fall through June 2022.?Prior to that, butter production was tracking very nicely with significant increases of two to three percent annually.?Since the beginning of 2021, production has fallen by five percent.

Disappearance from butter wholesale inventories (the?red?line) began declining in early 2022.?The decrease in production is significantly more than the butter disappearance from inventories.?That is depleting butter inventories.??

Butter has reached a record high price. Will it continue? Click here for more details on butter production, butter disappearance form wholesale inventories, inventory levels, and butter and butterfat pricing.