Butter has witnessed a sharp increase in costs, prompting many in our sector to reassess their ingredient budgets and menu offerings.

Understanding the contributing factors behind this price spike is crucial for catering professionals aiming to navigate this issue effectively.

The Current Landscape: Rising Prices in Focus

Recent reports indicate that wholesale butter prices have surged, and will continue to do so, creating a ripple effect across the catering sector. For businesses reliant on quality dairy products, this trend raises significant concerns regarding profit margins and pricing strategies.

Supply Chain Disruptions

Despite the easing of pandemic-related restrictions, the global dairy supply chain continues to face numerous challenges.

The repercussions of the COVID-19 pandemic are still being felt, as supply chain congestion persists. Delays in production and transportation, shortages of shipping containers, and increased freight costs result in an unstable supply of butter for wholesalers.

Furthermore, geopolitical tensions, such as trade policies and conflicts, can exacerbate these issues, affecting imports and exports of dairy products.

Increased Production Costs

Dairy farming and butter production have not been immune to rising input costs.

In 2024, farmers are contending with higher prices for feed, fuel, and energy, which significantly impact production expenses. Additionally, inflationary pressures are affecting labour costs, as farmers must compete for a limited workforce in an uncertain job market.

These higher production costs inevitably trickle down through the supply chain, causing wholesale butter prices to rise.

Climate Change Concerns

The impact of climate change on agriculture cannot be overlooked. Extreme weather events, such as droughts and floods, can disrupt milk production, leading to a decline in butter availability.

With farmers facing challenges related to livestock health and feed supply, the overall output of dairy products—and thus butter—can be compromised, resulting in elevated prices for catering businesses sourcing these essential ingredients.

Increasing Demand for Quality

In recent years, there has been a growing trend towards high-quality, artisanal, and sustainable products in the food industry.

While this shift reflects changing consumer preferences, catering businesses must be willing to adapt. Many suppliers are positioning their products as premium offerings, which may cater to this increasing demand, but at a higher price point.

We’ll keep you updated on price increases as and when they hit – but expect them to rise!