Butter prices are close to the historical highs in most of the world, due to several factors such as the challenges facing France to New Zealand, changing the tastes of consumers in Asia who stimulate the global demand for butter and the commercial decisions of dairy processors that defend their retributability, Bloomberg reports.
The final result is that of several pressures on the cost side for favorite consumers.
“When we have to change the supplier, we see what the difference is,” says Robin Orsoni, a commercial operator at the Parisian pastry chain. According to him, other butter suppliers perceive prices by 25% to 30% higher, but Mamiche decided to absorb the costs “because we want to make our clients happy, we need butter”.
About 70% of the world exported butter comes from two places: Europe and New Zealand. Each of these regions started 2025 with very small butter stocks, and this situation has increased prices at a record level, says the United Nations Food and Agriculture Organization (FAO).
The root of this crisis dates from 2022, when milk prices in Europe have reached the tip, after inflation and fuel prices have hit farmers, which made dairy processors look for the best way to maximize their profits.
Butter production has steadily decreased
The butter is obtained by removing the cream from the raw milk and beating it. At the end of the process, butter and milk are beaten, the latter “having some industrial uses, but they are relatively limited,” says Monika Totahova, an economist at FAO. Instead, “if you do cheese, you process the whole volume of milk,” says Tothova. Even the by-product resulting from the manufacture of cheese, called whey, is highly requested by food and nutrition food producers or by sports halls to ensure a protein intake.
EU dairy processors have begun to produce more and more cheese. As a result, the butter production of the Community block has steadily decreased and the US Department of Agriculture (USDA) is expected to descend to the lowest level in the last eight years, this season.
In New Zealand, a large dairy exporter and the country responsible for 2.5% of the world milk offer, butter production has not yet returned to the level of pandemic, fluctuating about 500,000 tonnes per year, starting in 2020. But, just when butter is not preferred by dairy processors, consumers, especially those in Asia.
The world butter consumption is expected to register an increase of 2.7%, in 2025, exceeding the production, according to USDA. In China, the demand has already increased by 6% over a single year. In Taiwan the consumption increased by 4%, between 2024 and 2025, while in India, the largest worldwide, increased by 3%.
What is affecting the prices on butter
The Bakehouse French pastry chain in Hong Kong has begun to change the tastes of Asian consumers. The annual butter consumption of this company is currently about 180 tonnes, up 96 tons, compared to the situation of the previous year, besides the 180 tonnes of cream, according to the co-founder Gregory Michaud.
As in Paris, the lack of butter and high prices forced the Bakehouse in Hong Kong to look for more suppliers in a short period of time.
Consumers cannot expect good news too soon. Butter prices are also affected by global conflicts, disturbances on supply chains and tariff wars that have prompted quotations to other raw materials.
The heat wave that Europe faced in recent weeks could aggravate the situation. High temperatures can reduce the milk production of cows, and in parallel they increase the demand for other products that need milk, such as ice cream.
