Extreme heat puts 'udder' toll on butter production ahead of holidays
Butter is a mainstay for Thanksgiving and might be part of a problem that people face when they head to the grocery store in search of the impacted holiday staple.
Extreme heat puts 'udder' toll on butter production
The extreme heat is just one of many factors in the drastic drop in butter production leading to the price spike. Scott Grawe from Iowa State University's Supply Chain Management Department joins FOX Weather to discuss more.
Beware of butter as you prepare to get your turkey and all the fixings. It will cost you to dress your biscuits.
With a year-over-year increase of 26.7%, the average cost of a pound of butter now sits at $4.70 - a dollar more than last year.
The extreme heat is just one of many factors in the drastic drop in butter production leading to the price spike.
TURKEY PRICES RISE AS HOLIDAY SEASON APPROACHES
A piece of butter lies on a table. Food prices have already risen in recent months and could rise even further.
(Hendrik Schmidt/picture alliance / Getty Images)
Rising energy, feed and labor costs have impacted the production of milk, butter and other dairy products, according to Scott Grawe with Iowa State University's Supply Chain Management Department.
"And it's certainly leading to higher prices," he said.
Grawe said butter is still available in retail stores, but it's certainly not in inventory the way it has been in the past.
The US Department of Agriculture reports the amount of butter in stores is down 22% compared to last year. The reason is due to various oil substitutes and extreme summer heat.
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Drought driving up feed-corn prices, hitting cattle ranchers hard
FOX Business' Connell McShane reports from a drought-stunted cornfield. Less corn means higher prices for cattle feed. One farmer said beef prices next year would have to rise by 30% for the ranch to break even.
"The war in Ukraine has really affected and played havoc with some of the other cooking oils, sunflower oil, vegetable oil and so forth," Grawe said. "And a lot of those go into the production of margarine, which is an alternative to butter."
As people gravitate toward butter and not other cooking oils, Grawe adds, it's going to drive the demand further up, which will eat into inventories.
The U.S. also had one of the hottest June's on record, July over performed, and August was also exceptionally hot as major cities all across America set heat records. It's a pattern that could repeat with butter season after season.
IMPACTS TO PECAN CROPS FROM RECENT HURRICANES EXPECTED TO BE MINIMAL
"If weather is kind of back to a little bit more reasonable levels, we can see increase in butter production," Grawe said. "But from a supply and demand standpoint, it's always hard to catch up if the demand continues to outpace supply."
If the availability and pricing of butter alternatives continue to stay high, Grawe said it's going to make it more difficult to catch up as people flock to butter as their alternative.