Costs For Cakes And Pastries Expected To Skyrocket As Butter Prices Spark ‘Major Crisis’ In Europe

At a time when prices are skyrocketing, stockpiles are running low and dairy giants are warning of an imminent shortage, Europeans are consuming more and more butter.

Market fears of a European butter shortage cannot be ignored, said Chef Séverine Nobis, who jointly runs a Parisian pastry school in the French capital, to a TV news Channel.

“The real fear would be the expansion of global changes in eating habits. If butter demand were to explode, there could be a shortage and in this case the price of the viennoiseries (sweet baked pastries) would also explode,” she said via email.

The increase in butter prices has not yet been passed down on to their consumers by Pâtisserie à la Carte, Nobis explained. However, if the market had not stabilized by the fall, the patisserie would be forced to consider doing so in a “reasonable” way, she admitted

“Today milk producers produce at a loss. We need to rethink the system so that they can make a living, avoid the closures of dairy farms and avoid the future shortage of butter.”

When Arla boss Peder Tuborgh suggested, at the start of July that insufficient milk being supplied by farmers could result in a butter shortage, he caused a wave of panic among consumers. Shoppers across Europe would start to feel the impact over the coming months, said the CEO of the world’s fourth-largest dairy company.

The case remains that an uptick in demand for butter comes at a time when milk production is declining and prices are soaring even though Tuborgh’s warnings were abruptly dismissed as “scaremongering” by the National Farmers Union. In France where farmers have concerns over a glut of 350,000 tons of powdered milk, which depresses prices further, the shortage of milk is reported to be particularly acute.

According to official figures released by the UN Food and Agriculture Organization, butter prices surged 14 percent to hit all-time highs in June.

According to the EU, one measure of butter reserves had fallen to just 1,396 tons by the end of May in the European Union. And therefore, compared to the 92,548 tons held in May 2016, this marked a 99 percent fall.

Driving the sharp increase in butter prices is a “long term shift” among consumers back towards more natural products in addition to the recent lack of supply, argued Kevin Bellamy, a global dairy strategist at Rabobank.

A report where scientists had been “wrong” about the dangers of saturated fats and were now encouraging people to “Eat Butter”, published in the Time Magazine’s memorable front cover three years ago was pointed out by him.

Consumer enthusiasm for butter has been supported by recent studies which have also questioned the link between butter and cardiovascular disease.

And as consumer demand for natural products increased, McDonald’s announced it was switching to butter in August 2015. Other companies soon followed suit.

A “major crisis” was constituted by butter’s meteoric price rise over the past 12 months, said France’s Federation of Bakeries (FEB).

“In France, if bakeries wish to make croissants, pain au chocolat or patisseries then consumers will have to pay more. We hope they understand our position because making quality products means charging a higher price at this time,” said Matthieu Labbé, a spokesperson for the FEB.

(Adapted from CNBC)

Categories: Economy & Finance, Strategy, Sustainability, Uncategorized

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