Butter prices "exploded"

In June, the price of butter in the U.S. rose to about $4.80 per pound (0.45 kg), according to the latest data from the Federal Reserve Bank of St. Louis. That is nearly 4 percent higher than in June 2024 and marks the highest level since early 2023, Forbes reported, citing the Business portal.

Limited global milk supplies and rising input costs, including labor and packaging, are the main drivers behind the surge, the Financial Times reported. The UN Food and Agriculture Organization’s (FAO) butter price index has reached an all-time high.

The Financial Times also reported that butter futures on international markets have risen sharply in recent weeks, reflecting similar supply-and-demand imbalances in the U.S., the EU, New Zealand, Argentina, and Australia.

What caused the price increase?

While the recent rise in U.S. butter prices reflects domestic inflationary pressures, it is also closely tied to global developments. As Bloomberg reported in July, a reduced global milk supply, caused by bad weather, shrinking livestock numbers, and rising production costs, has pushed international butter prices higher.

Dairy exports from major producers such as New Zealand and parts of Europe entered 2025 with historically low stocks, according to FAO data. Together, they account for about 70 percent of global butter exports, a shortage that has driven prices sharply upward.

In New Zealand, butter prices rose 46.5 percent through June, reaching about $5.10 per pound, Bloomberg reported.

Although the U.S. produces most of its butter, international benchmark prices affect both domestic wholesale and retail markets. Rising input costs, such as labor, animal feed, and packaging, are also putting pressure on butter prices in the U.S., Europe, and New Zealand, especially ahead of peak consumption seasons.

Concern among consumers

A Reuters/Ipsos survey conducted in April found that nearly 90 percent of Americans are worried about rising inflation, while only 32 percent approve of how President Donald Trump is handling the issue.

Although the overall Consumer Price Index (CPI) has remained relatively low this year at around 2.3 percent, close to the Federal Reserve’s long-term target of 2 percent, consumer concerns persist. Inflation is still well below the June 2022 peak of 9 percent. Still, economists warn that Trump’s tariffs could drive prices higher.

Inflation has ticked up slightly in recent months, reaching 2.7 percent in June, the second consecutive month of growth after 2.3 percent in April.

The Bureau of Labor Statistics is expected to release CPI data for July in the coming days. According to Business Insider, the report is likely to show further inflationary pressures, with Trump’s trade measures seen as a factor that could push consumer prices higher.