Aditi Shrikant -
CNBC
As we head into baking season, one key ingredient will get harder to find: butter.
And the lack of supply is already driving up prices.
In January, the median price of butter was $3.67 a pound, according to the Federal Reserve Bank of St. Louis.
In September, it reached 4.70 dollars per pound.
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"Prices are not going to go down," said Scott Grawe, a professor of supply chain management at Iowa State University.
As of today, Trader Joe's has the lowest price, and Target the highest:
Trader Joe's: $3.69 a pound
Costco/Kirkland butter: $4.37 a pound
Walmart/Great Value Butter: $4.48 per pound
Target/Good & Gather: 4.69 per pound
Why is the price of butter so high?
Milk production in January 2022 was down 1.4% from a year earlier, according to a USDA report.
Due to rising feed costs and continuing labor shortages, buying and maintaining cows is more expensive for farmers than in previous years.
A woman makes pastries with butter. Anjelika Gretskaia / Getty Images
And while some technological innovations boosted production, environmental factors did the opposite.
Extreme temperatures, floods and droughts, along with frequent and intense storms, "weighed on productivity growth," according to a USDA report.
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"Such conditions can affect the availability and quality of feed, as well as the physiological functioning and reproductive health of dairy cows," says the report.
"Negative environmental conditions also lead to the distribution and resistance of parasites and pathogens that affect the health of animals."
To what is attributed the increase in the cost of food?
This is what the experts say
Oct. 3, 202201:49
Processing plants are also experiencing a labor shortage.
Also, cold storage reserves are running low.
As of August 2022, there were some 282.6 million pounds of butter in storage, down from 362.7 million pounds in the same month last year, according to a USDA report.
Compare prices and stock up
If you want to save on butter, it's a good idea to shop around.
Butter at Trader Joe's, for example, is about a dollar less per pound than at Target.
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And if you see a good deal, buy it to stock up.
Butter bars can be kept in the freezer for up to 12 months.
“As baking season approaches, demand isn't going to slow down,” Grawe recalled.
“If demand remains high and starts to increase, it will be much harder for suppliers to catch up,” he concluded.
