I can’t believe there’s not butter

Forget cuffing season — it’s about to be baking season. And this year, we may have to go through it a little short on one key ingredient: butter.

According to the Agriculture Department, the amount of butter in US cold storage facilities at the end of July was down 21% year-over-year to its lowest level since 2017. Which probably isn’t a great sign, considering manufacturers typically produce much of their butter during the first half of the year, to be stored ahead of when demand is at its strongest: the winter holidays.

🧈📉 Driving the trend… High prices for livestock feed and labor shortages, as well as other persisting economic and geopolitical factors, the WSJ reports.

Though to put it simply, the supply chain alllllll starts with milk (the ad execs behind the “Got Milk” campaigns are high-fiving rn). And not to state the obvious, but a large portion of milk consumed in the US comes from cows. This is important because a labor shortage and higher prices for feed are reportedly leading farmers to have less animals. Less cows means less milk, which in turn leads to less butter.

• Milk production was down 1% through June, compared to a typical annual growth rate of 1.5%-2.5%.
• Lower supply + consistent/strong demand = higher prices. The price of butter is up ~25% year-over-year, trailing only eggs – the leading grocery store inflation item – which clocks in at 40%.

+One interesting thing: Per the WSJ, the dairy industry’s pecking order gives bottlers first dibs on the milk supply; then manufacturers of ice cream, yogurt, and cheese; then butter churns.

Or to use an analogy, bottlers are driving the car; ice cream, yogurt, and cheese manufacturers get shotgun and the two window seats; and butter churns are riding 🤫… in the middle seat.