photo courtesy Cabot Creamery; Are these beauties sleeping on cashmere blankets these days or something? Somehow, I doubt it!
photo courtesy ElizabethWarren.com
Even though I know I am no Elizabeth Warren, I am beginning to identify with her fervor (well, I actually did that a long time ago) – only my venue is a slightly more narrow area of interest. She is the consumer advocate around issues concerning abuses by Financial Institutions and reformer of Student Loan programs, among other things. I am all wound up over, well, something different, but not irrelevant – the price of a pound of Butter! Can’t say we are in the same league on any level, but let’s just say I can feel her ire.
Over the last few weeks I have “gotten my panties in a bunch” so to speak about my Butter supply. It started out sort of innocently and now it has grown into a full-scale curiosity – I decided I wanted to know how the price of butter is set in this country, and locally.
Yesterday it all came to a head as I got into a brief conversation with two women in Kings in Bernardsville. One was a person who worked for a company and was promoting imported Gruyere cheese. I picked up a small piece – and I do mean small, and it was over $9. I love Gruyere and I use it often but I was not going to pay $9. for about 4 oz of this cheese. Another customer came over and got to chatting about the price of cheese, butter and milk. We agreed that so many people must not only be completely shut out of the market when it comes to feeding their families these products (gruyere, organic milk and all butter), but we couldn’t imagine how people making $50,000 a year could afford to eat. While at the same time we hear and read all over about there being little or no inflation – one need only to visit a grocery store to see otherwise. Somewhere, something is deeply amiss – the price of food is skyrocketing on the local level. The market basket must be askew and the inflation calculations must be seriously underweighting grocery items.
Now, I realize I shop at Kings and not at the most price advantageous markets. For me, it is not worth driving to Walmart or other mass market food “retailers”. I don’t buy in bulk and I don’t enjoy shopping at big box stores. The only exception for me is Wegman’s, where I stop whenever I am going back and forth to Lambertville. There are only two of us in the house these days and my marketing is limited to 1-2 meals a day for us. The only other major purchases I make are related to my baking schedule. And so,,,,,,,,,,,,
My own experience began with first, Kings Supermarkets deciding they no longer would carry my favorite supermarket butter, Cabot’s. I had been noticing the price of butter, milk, cheese and eggs going up for some time. However, when this happened, I asked about this in the two stores I frequent the most, Bernardsville and Mendham and also sent an email to the Kings customer service people. They told me they have recently gotten a new supplier and they don’t carry Cabot’s butter. Then I got a note from the Manager of the Gilette store and he said they have it. Mendham has salted but no unsalted. Bernardsville, where I usually go (at least) once a day, has had none for the last month. Interestingly, they still have Cabot’s Cheese.
I got to thinking about how little I really know about how products get to the local grocery stores and since the price of oil has dropped so much in the last few weeks, my interest was piqued – I started a little research into the commodity of butter – and Dairy in general. Let’s just say I don’t think the cows are the ones who are benefitting a whole lot while this is going on. Let’s just say I am wondering if there is something fishy going on here……….
Now, I’d say I buy on average about 4 pounds of butter a week – and I used to stock up when it went on sale for $3.99 a pound. Now the price of Butter at Kings and Shop Rite is $6.99 for basic supermarket brands. This is along with the price of a half gallon of milk – King’s organic milk is $4.19 and it is 30 cents cheaper at Whole Foods. Just saying – you’d have to be hard pressed to find cheaper things at Whole Foods – but I watch these things. So, on an ongoing basis, milk is cheaper at Whole Foods than in Kings as are their berries. I have brought this to the attention of the Kings people and they scoff at me. I think they need to do a little research around, don’t you?
Anyway, let’s just say I buy a lot of butter. I use it daily in my experiments. I’m not in the professional bakery business, and I guess right now, I should be glad I am not. I have noticed that the price of butter in my local grocery stores has risen as much as $3.00 a pound in the last year.
“On Thursday, the wholesale price of butter was at a record, $3.0375 a pound, up from $3 on Monday, according to CME Group’s Daily Dairy Report. On Friday, it jumped to $3.06.” according to a DOA September report. I have found other local newspaper reports, like from Albany for example saying the price of butter is $4.00 a pound. So, why is butter $6.99 a pound in New Jersey? I want to know what was going on here. You have to have a thorough understanding of how pricing is determined and study the data. Ok.
According to Gail at Cabot Creamery, the price of butter fluctuates daily in accordance with the butter market. However, local grocers set their own prices. Hmmmm……..
If you click on this link, you will see that the price of butter is up 100% from 9/14/9/13 in the U.S. Other producing countries are showing big decreases. I have long thought that I should have a better handle on how commodity prices work in our country – along I have long suspected that any of these traded on the CME are subject to, well, let’s just say, speculation figures well into the calculation. But, now I need to see. I wondered why the price of butter in New York (state, not city) was $3.00 a pound less than in New Jersey, say. We are talking about some big percentage differences here, after all.
Here are the sources I have begun looking into:
1. http://www.dairyco.org.uk/market-information/milk-prices-contracts/wholesale-prices/world-wholesale-prices/butter- prices/#.VGIAH0uWfFJ
WORLD WHOLESALE BUTTER PRICES
Published 10 October 14
US$/tonne Sep-14 Aug-14 % diff. Sep-13 % diff. 13-14
US $6,289 $5,557 13.2% $3,145 100.0%
Oceania $2,994 $3,263 -8.2% $3,975 -24.7%
EU $3,781 $4,181 -9.6% $5,594 -32.4%
Average* $4,355 $4,334 0.5% $4,238 2.8%
* Simple unweighted average of the prices for US, Oceania and EU.
image courtesy dairyco.org.uk
Source: USDA Please note that prices can vary markedly within each market sector: the prices above are intended to give a guide to trends in price changes, but the absolute values experienced in the market place may differ from those shown.
September 19, 2014: http://www.timesunion.com/business/article/Butter-prices-soar-as-demand-rises-5768227.php
Now here is an interesting tidbit. There is a new “Margin Protection Program” for Dairy Farmers – http://www.coshoctontribune.com/story/news/local/2014/09/26/dairy-margin-protection-program-looks-milk-prices/16290333/
2. http://www.dairymarkets.org/mpp/
3. http://www.clal.it/en/?section=burro_usa
4. As of right now, I have reached out to Kings and Cabot Creamery for any information they are willing to share about this subject.
As with many commodities, the price goes through a number of gyrations depending on the market at the CME, the wholesale price paid to Farmers, middlemen and retailers. In addition, we see that the Federal Government, through the Farm Bill is involved and this year there is a new Margin Protection Plan. While it may take me a little while, I hope to get to a point where I can understand and explain this. Hopefully, I will be able to shed some light on the astronomical price of a pound of butter at the supermarket. We’ll see.
I will keep you “posted”.