Canadian Manufacturing

Increased butter consumption pinching supply

Consumers are being told not to worry about a shortage of the sp[read many consumers now perceive as a healthier option than margarine, a trans fat

November 25, 2015  by Lois Abraham, The Canadian Press

TORONTO—There might be an increased demand for butter, but consumers are being told not to worry about a shortage affecting their holiday baking.

“There’s no doubt that the market is tight and that is being explained by the fact that there has been an increasing demand for not just butter but for dairy products that contain a higher butter-fat percentage over the past two or three years,” Yves Leduc, director of policy and trade for the Dairy Farmers of Canada, said Tuesday.

But the industry is taking steps to ensure butter and cream remain readily available in stores.

The industry estimates consumer demand and sets a production quota to meet it, but the demand has increased faster than anticipated.


“Just last year there’s been an increase of about six to eight per cent of the production level as a response to meet that increased demand and the Canadian Dairy Commission has just announced an additional increase of quota of two per cent starting Dec. 1,” he said from Ottawa.

But if demand continues to outstrip supply, the commission can import butter from other countries.

Leduc said the trend is similar in the United States.

“The U.S. market when it comes to butter and butter fat is also fairly tight these days to a point where the price of butter on the U.S. market is greater than the price of Canadian butter right now.”

He says industry research shows that there’s been a resurgence of interest in butter, a saturated fat, among consumers who perceive it as a healthier option when consumed in moderation than margarine, a trans fat.

“I think the result of this research has had an impact on consumers turning back to consuming a product like butter which is as natural as you can get. There’s no added ingredients or additives in butter.”

Leduc says the price of butter should not rise in the foreseeable future in part because of the stability of the Canadian supply management system.

“You have a price for milk going into the production of butter so whether the demand goes up or down the price for the milk going into the production of butter will remain the same.”

However, the industry has no control over what happens at the retail level, he says.