Dairy is on the rise again
In the last year, we have seen dairy prices rise drastically. Butter and cream have increased by over 50%, cheese by 30% and milk by 35%. In the last month alone, the price of cream and butter have soared by 20% and we haven’t seen the last of it…
The boss of Arla has said ‘The UK could be facing a butter and cream shortage this Christmas.’ Then what will we have with our mince pies?
Dairy price fluctuations aren’t unheard of, however, the recent increases have led to record high prices in butter, cream, milk and cheese. The price increases in these products are having knock-on effects on other items as well. Products that use these ingredients such as croissants and other pastries, shortbread and chocolate are seeing increases as well. A Christmas without pastries, shortbread, cream or chocolate could be rather bland!
Why the increase?
In 2015/16 there was an oversupply of milk in the dairy industry which in turn led to price decreases. Farmers ended up throwing away gallons of milk and so they started to cut back on production. However, supply for dairy products has remained steady. There is now not enough supply to meet the demand, which has led to price increases.
The demand for dairy;
In recent times the demand for dairy has increased because of many reasons;
The rise of home baking
Shows like ‘The Great British Bake Off’ have seen us Brits reigniting our passion for home baking. The bake off boom is seeing people wanting to try and master the art of cake making, which is leading to people wanting to buy more baking goods like butter and cream.
Butter isn’t that bad for you
Back in the 80’s, the advice given to the population was to cut back on dairy and fats and increase carbs. This led food makers to create low-fat spreads, including cholesterol-lowering products, while consumers avoided cheese, milk and cream. However, studies now show that butter is in fact not as bad for you as once believed. This has meant more people are foregoing the alternatives and going back to butter. It isn’t suddenly a health food, but you can now enjoy that buttery toast without the guilt!
The Financial Times have also blamed the cold spring for the increases. The wintery conditions lingered throughout March which led to poor grazing conditions, which in turn led to cows not producing as much milk. The weather has picked up since, but the effect is still being felt.
Semi Skimmed or Whole Milk?
With the news that low-fat isn’t necessarily better for you, consumers are having more whole milk as opposed to semi-skimmed milk, this is leading to cream prices rising. What has that got to do with cream prices I hear you ask? Well, semi-skimmed milk is created by skimming cream from whole milk, producing a more watery liquid. With more people favouring whole milk, less cream is being skimmed. Which ultimately is leading to shortages and price increases.
Dairy farms are in short supply. Many are closing, or struggling to stay open due to tough conditions and little money in production. Farmers work long hard days. They are up at the crack of dawn and usually work right through to the night, with little to no days off a year. It is a physically demanding job and regardless of the weather they are outside, come rain or shine. It’s a tough job, but someone has to do it. So at the end of the day is it such a bad thing to pay farmers just a few pence more per litre?
UK dairy farmers produce around 14.5 million tonnes of milk each year, which is 2.4% of the world’s milk. This puts Britain at the 10th topmost producer of cow’s milk globally, and the third largest one in the European Union, falling behind only Germany and France. This is impressive considering at last count there were 1.8 million dairy cows in the UK, which is only 0.6% of the 264 million dairy cows worldwide. To find out more about the top 10 milk producing countries click here.
Nobody knows how long these prices will stay high for, it is something that we just cannot predict. However, when demand is high, supply increases which will then lead to price reductions. We just can’t say when we will see these.
There are other options out there. You could opt for UHT milk and cream, you could check out spreads and margarines or you could give the dairy free alternatives a go. If you would like to discuss how we can help. Give us a call today and we will look into the best deals for you.
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