Belfast Telegraph

Fears spread block of butter could cost £6 by Christmas

By Emma Deighan

A rise in demand for butter and a shortage of milk is causing prices of the creamy yellow stuff to rocket, according to industry experts who are split as to whether the price hike will continue over Christmas.

BBC food guru Kim Lenaghan slammed the £4 price tag of a 500g block of butter on the supermarket shelves here on her Facebook page.

As of yesterday, the same 500g foil-wrapped product, which was on sale for as little as £1.74 in SuperValu this time last year, was still priced at £4 across major supermarkets.

Allison Abernethy of Abernethy Butter believes we could be looking at paying £6 per pound come Christmas.

"Last year milk prices were at rock bottom so lots of farmers went out of business or culled their cows. Now there is a shortage of both milk and cream," she said.

Arla, the farmer-owned dairy company whose brands include Lurpak and Anchor, said that a shortage of milk across Europe, a higher demand for butter and a period of time when dairy manufacturers placed more milk in cheese production because the category yielded better returns, were behind the price rises.

He said: "We do expect the high demand for butter to continue throughout the year, potentially creating a shortage of butter products in parts of the European food and dairy industry, but it is important to note that there will still be butter available."

Ulster Farmers Union chairman William Irvine said: "Consumer demand for butter has been the driving force behind keeping prices up."

According to global dairy experts, butter is enjoying a comeback after consumers had opted for margarine for many years, believing it to be a healthier alternative.

An increase in demand from Asia is also adding pressure to the market.

But not all experts agree that prices will remain as high as they are now over Christmas. Dairy UK chief executive Dr Judith Bryans said: "Whilst we can't commit to any firm predictions, we don't believe prices will be as high in the coming weeks and months as they have been, and that's the market righting itself."

But Arla added: "Our most optimistic forecasts show that total production in 2017 will only be on a par with the lower volumes produced in 2016. So even though production is increasing, it is not expected to significantly change the imbalance in supply and demand in time to impact butter production for the holiday season."

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