Chart of the week: America’s butter mountain

Spot butter prices in America hit a record peak above $3 a pound in 2015, but now they are falling. Butter stockpiles are up 52% from a year ago and close to a 23-year high.

814-COTW-1200

Spot butter prices in America hit a record peak above $3 a pound in 2015, but now they are falling. Butter has gone through a typical pattern for soft commodities: strong demand and higher prices prompt a jump in production, resulting in a glut and falling prices.

After 2012 demand jumped as anti-fat diets went out of fashion and people started buying butter again. Consumption reached a 40-year high. Producers diverted resources from other dairy products to meet demand, says Chelsey Dulaney in Barron's.

Now stockpiles are up 52% from a year ago and close to a 23-year high.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Viewpoint

Deutsche Bank