Butter cheaper than ever: Farmers sound the alarm over "bargain prices"

The surprisingly fast price drop in butter is hitting local dairies and dairy farmers hard. Supermarket chain store brand butter has become almost half as cheap within a few months. Since December 11, a discounter has been selling a 250-g pack of Austrian butter for 1.29 euros. "These bargain prices are the direct result of the harmful price debate," criticized Austrian Chamber of Agriculture President Josef Moosbrugger to the APA.

Farmers Criticize "Bargain Prices" for Butter

The prices for dairy brand butter and organic butter in Austria have not yet fallen as sharply as for store brand butter. Higher milk volumes in Europe and tough price competition in Germany have been pushing down the butter price for months. "The development is dramatic and unnecessary," said Dairy Association Managing Director Johann Költringer to the APA. The association represents the interests of local dairies. The butter price drop is "very unexpected" and has never occurred at this time of year, according to Költringer. In Germany, the discount giants Aldi and Lidl are competing for the lowest butter price. "We hope for the responsibility of the Austrian trade," said the Dairy Association Managing Director towards the food retailers. Spar, Rewe (Billa, Penny, Adeg), Hofer, and Lidl have a market share of around 94 percent.

Chamber of Agriculture Sees "Ruinous Prices"

"This massive price war destroys animal welfare efforts, family farms, jobs in the upstream and downstream sectors, and ultimately regional supply security," criticized the Chamber of Agriculture chief. Moosbrugger calls on "the entire value chain to refrain from ruinous prices and thus short-sighted farm-destroying actions." About 4 to 5 liters of milk are needed to produce 250 grams of butter. Furthermore, the costs of animal husbandry, logistics, and processing must be covered.

In Germany, the price drop is also causing a great stir. The Bavarian Farmers' Association (BBV) wants the current butter prices to be reviewed by the Federal Cartel Office. With a consumer butter price of 0.99 euros for a 250-gram pack, the production costs in the food chain are not covered - neither for the dairies nor for the farmers, argues the BBV. "This raises questions about whether butter is still being traded at a cost-covering price or possibly being sold below cost price - an approach that may be legally inadmissible," said the Bavarian Farmers' Association.

Cookie Bakers as Beneficiaries of the Price Drop

Private cookie bakers and food manufacturers are pleased with the lower butter price before Christmas. Whether the decreased butter prices will also lead to a noticeable price drop in baked goods, among other things, cannot yet be estimated.

(APA/Red)

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