Butter prices in the EU have increased by almost 20%

Europeans face rising butter prices on Christmas Eve

In the 26 Member States of the European Union, the price of butter increased by an average of 19% between October 2023 and October 2024.

In Slovakia, the increase was 49%, and in Germany and the Czech Republic 40%.

In Germany, a 250-gram pack of butter now costs between €2.40 and €4, depending on brand and quality.

According to economist Mariusz Dziwulski, food and agricultural market analyst at PKO Bank Polski in Warsaw, the price increase is due to the global shortage of milk, which a drop in production has caused, also felt in the United States and in New Zealand, one of the world's top three butter exporters.

European butter generally has a higher fat content than butter sold in the USA. It is also sold by weight in standard packaging, so food manufacturers cannot hide price increases by reducing the size.

The shortage of butter in France in the 19th century led to the invention of margarine, but the French remain among the largest consumers of butter on the continent, including use in bakery products and sauces.

Polish buyers affected

Butter is so important to Poland that the government has built up strategic reserves equivalent to natural gas and vaccines against Covid-19. A few days ago, the government announced the sale of 1,000 tonnes of butter from its reserves in response to soaring prices.

According to the government agency, the National Agricultural Support Centre, the price of butter in Poland has increased by 11.4% since the beginning of November and by 49.2% over the whole of last year. By 8 December, it had reached almost 37 zlotys (around €8.7) per kilogram^[1].

"Butter gets more expensive every month," says Danuta Osinska, 77, who shops at a grocery store in Warsaw.

She and her husband love butter, but can barely pay for medicine on their small pensions, so the couple now eat less butter and more margarine, even though they don't like the taste.

"You can't compare them," says Osinska, "Life is getting harder and harder."

The price of butter has become a political issue in Poland. With presidential elections due next year, Prime Minister Donald Tusk's opponents blame him and the Civic Platform party for rising prices. In Poland, the actions of the Governor of the National Bank, who belongs to the opposite political camp, are also criticized.

Lower inflation forecast for the EU and the threat of a trade war

According to Agnieszka Maliszewska, Director of the Polish Chamber of Dairy, some consumers are basing their shopping decisions on the price of butter, which has led to price wars between grocery chains, which in the past have sometimes artificially kept prices low to the detriment of producers.

A. Maliszewska believes that the rise in butter prices is due to both domestic, EU-specific and global problems. In Poland, she argues, the main cause is the shortage of milk fat, resulting from farmers closing their businesses due to low profitability and hard work.

She and other experts also attribute the drop in milk production to the rise in energy prices following the West's rush to impose sanctions on Russia, which attacked Ukraine.

Economist M. Dzivulski believes that drought is also a factor in the drop in production. The fall in milk prices last year has discouraged investment and pushed EU producers to produce more cheese, which ensures higher profitability, he said.

The outbreak of bluetongue virus, an insect-borne disease that is harmless to humans but can be fatal to sheep, cows and goats, may also have played a role, Dzivulskis pointed out.

Olive oil is the main choice of Southern Europeans

Southern European countries, which are much more dependent on olive oil, are less affected by rising butter prices.

Since last year, the price of butter in Italy has risen by an average of 44%, according to data from dairy market analyst CLAL. Italy is the seventh largest producer of butter in Europe, but the preference for olive oil, even in some desserts, means that the price of butter is not a major concern for the Apennines.

In Paris, however, Arnaud Delmontel, a pastry chef who bakes croissants and chocolate muffins for his pastry shop, reported that the price of butter has risen by a quarter since September alone.

Some competitors are switching to margarine, he says, but he has no intention of doing so.

"This distorts the idea of what a croissant is," Delmontel says, "A croissant is made with butter!"

In Russia, the price of butter has increased by a third

Since the beginning of the year, butter has risen in price by 32.1% in the Russian Federation, and by 34.1% over the year, Rosstat reported.

Russia's main butter producers have announced a decrease in the supply of their products to shops. The reasons for the drop in production are cited as a shortage of raw materials and a significant cost increase.

According to Alexander Dvoinyh, head of the Federation Council's Committee for Agrarian and Food Policy and Environmental Management, low profitability may be among the reasons for the rise in butter prices.

Mikhail Deliagin, Deputy Chairman of the State Duma Committee on Economic Policy, expressed the opinion that the shortage of butter and the rise in its prices are caused by the soft loans being limited to agriculture.

"Soyuzmolok noted that the increase in the country's consumption of dairy fats, particularly cheese and ice cream, coincided with a sharp drop in imports due to the withdrawal of South American and New Zealand producers from the Russian market.