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.
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.
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Deutsche Bank